Aurumin unloads Mt Dimer gold tenements to Beacon Minerals in a winning deal for both companies
Aurumin (ASX: AUN) is set to get a major cash infusion after signing a binding sale agreement whereby Beacon Minerals (ASX: BCN) will buy its Mt Dimer gold tenements located 120km northeast of Southern Cross, Western Australia.
One of the two historical mines at Mt Dimer, Golden Slipper, was mined in the 1990s and produced 125,000oz at an average of 6.4g/t gold.
For Beacon Minerals, the deal means it acquires another source of ore to feed into its Jaurdi mill.
As for Aurumin, it will be able to extinguish debt with a $3.5 million cash infusion and will also have a royalty stream when Mt Dimer gets into production.
‘Good outcome for both parties’
Aurumin managing director Brad Valiukas said he looked forward to Beacon putting Mt Dimer into production.
“This is a good outcome for both parties, allowing Aurumin to unlock value from the Mt Dimer mining tenements on completion and have continued upside exposure with the royalty.”
Mr Valiukas said there was still plenty of upside at Mt Dimer.
The divestment will allow his company to pay back the majority of a convertible note on which there is still $4.4 million owing.
Terms of the deal
Beacon Minerals, after completion of due diligence, will pay $3 million in cash, and pay Aurumin a 2% net smelter royalty on gold production at Mt Dimer above 12,000oz and also on all other metals.
In addition, it will unconditionally upfront invest $500,000 in Aurumin through a placement of 20 million shares at $0.025 each in return for an exclusivity period during which it can conduct due diligence.
Aurumin will now concentrate on its Sandstone gold project, whose acquisition in early 2022 was finalised by means of the still outstanding convertible note.
Aurumin’s Sandstone gold project’s resource currently stands at 881,300oz and with what the company describes as “significant” project infrastructure and an expanding tenement footprint.
For Beacon Minerals, the agreement meets its strategic plan for increasing mine life at the Jaurdi project by acquiring deposits that complement the existing operation.
Last December Beacon purchased the Geko tenements from private vendors, with the deposit located 15km from its gold processing plant.
In August 2021 it outlaid $14 million to buy the MacPhersons Reward project, 45km from the Jaurdi mill.