Talisman managing director Dan Madden said the decision to divest Sinclair came after the company received a number of approaches from parties interested in the asset.
He said the company believed Saracen’s offer represented the “best outcome” for Talisman shareholders with an upfront $10 million payment and exposure to future production via a 2% NSR royalty, which covers any nickel and non-precious metal output.
“The transaction will also remove more than $2 million in annual commitments relating to Sinclair, plus a contingent environmental liability of $9 million.”
Mr Madden added the sale also removed financial and other risks for Talisman.
Once the transaction is finalised, Talisman anticipates it will have $18 million to expand exploration activities at its Lachlan copper-gold project and Lucknow gold projects in New South Wales.
The company also noted it would be evaluating potential project acquisitions.
Lucknow gold project
A month ago, Talisman revealed it had entered an agreement to secure a 70% stake in Lucknow by spending $1.5 million on exploration over the next four years, with $350,000 to be spent in the first 12 months.
According to Talisman, the Lucknow goldfield was one of Australia’s first gold regions to be commercially mined.
Historic records have indicated about 400,000 ounces of gold was mined at Lucknow with average grades ranging between 100 grams per tonne and 200g/t gold.
Lachlan copper-gold project
Lucknow is about 200km from Talisman’s Lachlan project, where targets have been earmarked for drill testing including the Cumbine prospect.
Earlier this month, Talisman reported drilling at Lachlan’s Blind Calf Lode had returned 10m at 4.32% copper from 176m, including 4m at 7.68% copper from 180m, 5m at 1.14% copper from 129m, and 5m at 1.87% copper from 220m.
By midday, shares in Talisman had lifted more than 11% to $ 0.11 on the divestment news, while Saracen’s share price slipped over 3% to trade at $3.45.