WIN Metals to acquire Palm Springs gold project from Meteoric Resources
WIN Metals (ASX: WIN) will spend up to $5 million on acquiring the high-grade Palm Springs gold project in Western Australia’s Kimberley region from Meteoric Resources (ASX: MEI).
The project comprises a mineral resource estimate of 5.6 million tonnes at 2.0 grams per tonne for 357,000 ounces of gold, as well as a series of high-order drill targets at over 60 known gold occurrences across the 100-square-kilometre landholding.
Upon completion of the deal, WIN will change the Palm Springs project’s name to Butchers Creek, which is reflective of its primary gold endowment at the historic Butchers Creek gold mine.
Extended mineralisation
Previous production between 1995 and 1997 totalled 52,000oz at 2.1g/t until mining ceased due to historically low gold prices.
Meteoric acquired Palm Springs in 2020 and the company has since extended the thick mineralisation 360 metres to the south of the current open pit.
The best results to this point have been 69m at 4.38g/t gold from 181m, including 19m at 7.22g/t from 204m, 56m at 2.69g/t gold from 181m including 18m at 4.85g/t from 203m and 45m at 2.25g/t gold from 259m including 5m at 10.77g/t from 261m.
Major shareholder
The staged consideration for WIN’s acquisition will include an upfront exclusivity fee of $50,000 plus a cash payment of $950,000 and $1.75m worth of WIN shares upon settlement.
The share issue will see Meteoric become a major shareholder in WIN.
WIN will make further payments to Meteoric of $1m 18 months after settlement and an additional $1.25m upon the production of 20,000oz of gold from Palm Springs.
The deal is conditional on WIN completing a minimum $3m capital raising within 75 days of signing the agreement.
New direction
WIN chief executive officer Steve Norregaard said the acquisition would signal a new era for the company.
“This pivotal deal heralds the end of a challenging period searching for a new strategic direction to unlock value for our shareholders and attract new investor interest,” he said.
“We believe we have made a great choice in securing a quality gold asset with ample growth upside and a proven production history in what we regard as a forgotten gold province.”
He said the company had completed field reconnaissance work in July as part of the due diligence process and would commence drilling within the next six weeks.
WIN’s existing nickel and lithium resource base will remain in the company’s portfolio as a complement to the gold acquisition.
‘Right time’
Divestment of Palm Springs will allow Meteoric to focus on its flagship Caldeira rare earth ionic clay project in Brazil, which it acquired in late 2022, with executive chair Dr Andrew Tunks saying the selling opportunity had come along at the right time.
“This prospective gold asset deserves dedicated attention in the current gold market and the board of Meteoric is pleased that WIN is able to provide this focus given our intense efforts on the Caldeira project, which is rapidly progressing towards development,” he said.
“Our investors will retain ongoing exposure to exploration and development through our major shareholding in WIN and we look forward to seeing the company succeed in advancing this project.”