Westgold divests Mt Henry gold project for $64.6m
Westgold Resources (ASX: WGX) will divest the Mt Henry-Selene gold project in WA, closely following the announced spin-out of the company’s non-core Murchison projects.Alicanto (ASX: AQI) will acquire 100% of the 150moz project including all associated mining tenements, licences, heritage agreements, contracts and technical information.The Mt Henry project was acquired by Westgold in 2024 after being placed on care and maintenance in 2019 by Karora Resources. It hosts a combined mineral resource of 24.5mt at 1.2g/t gold for 915,000oz of contained gold and an ore reserve of 11.7mt at 1.3g/t gold for 478,300oz.Westgold will receive $15m cash and $19.6m via the issue of 19.9% of the ordinary shares in Alicanto post transaction close.Westgold says the transaction is aligned with its long-term strategic plans of focusing on larger, core operating assets rather than non-core assets such as Mt Henry.“This transaction delivers Westgold shareholders an attractive mix of cash, exposure to project upside via a large strategic shareholding and deferred consideration payable on specific project milestones,” Westgold managing director and chief executive Wayne Bramwell said.“Westgold is pleased to partner with Alicanto, whose board and management team are experienced and committed explorers and have a demonstrable record of rapidly advancing gold projects.“Westgold continues to progress discussions in relation to the potential sale of its Peak Hill and Chalice gold assets following strong inbound interest.”Alicanto interim executive chair Ray Shorrocks comments on the transaction.“The Mt Henry acquisition is an exceptional company-making opportunity for Alicanto,” he said.“It provides immediate scale, a high-quality, near-surface Resource and a clear platform for rapid growth and development.“The .9moz resource and pit shells were calculated when the gold price was one-quarter of its current level and the historic drilling data shows most holes ended in mineralisation.”The divestment follows Westgold’s recently announced demerger, with the company spinning out its non-core Reedy’s and Comet gold exploration assets to new stand-alone Valient Gold.The Reedy’s and Comet assets have a combined mineral resource of 15.6mt at 2.4g/t gold for 1.2moz.Both projects were previously in production before being placed on care and maintenance in FY23.“By establishing Valiant, we create an independent, well-funded gold company that can bring forward value from smaller assets such as the Comet and South Emu-Triton underground mines and unlock the exploration potential across the Reedy and Comet packages,” Mr Bramwell said.“Valiant will have a fast-track to cashflow with an ore purchase agreement (OPA) to be entered into with Westgold.“This collaborative, capital efficient model is proven, as demonstrated by Westgold’s investment and OPA with New Murchison Gold (ASX: NMG).“This model saw NMG transition from explorer to producer, with gold production from NMG’s Crown Prince deposit now delivering high grade oxide ore to Westgold’s Meekatharra processing hub.“Valiant can replicate this success. With several small underground mines in care and maintenance, a range of open pit opportunities and exploration upside, the Valiant team has multiple near-term restart and growth options to deliver near term cashflow.”Westgold will retain upside to exploration and production success through a substantial equity holding in Valiant.
