Kaiser Reef to divest NSW exploration assets for up to $3.62m

The divestment allows Kaiser Reef to focus on its Victorian assets.
The divestment allows Kaiser Reef to focus on its Victorian assets.

Kaiser Reef (ASX: KAU) is set to divest its NSW exploration assets to unlisted public company HearMeOut for up to $3.62m.

Kaiser Reef is divesting the Stuart Town group of tenements as well as the Macquarie North tenements.

Although the company considers the tenements to be highly prospective for gold mineralisation, it will focus on near-term gold mining growth opportunities across its Victorian production and exploration assets.

Kaiser will retain exposure to the NSW projects with a 20% free carried interest until a decision to mine is made.

Subject to satisfaction, due diligence, ASX approval, HearMeOut completing a capital raising and various regulatory approvals, Kaiser will receive a $25k exclusivity fee, $1.1m in HearMeOut scrip, $500k reimbursement for past exploration and up to $2m in performance rights.

Kaiser managing director Jonathan Downes says the company is pleased with the divestment.

“As Kaiser Reef continues to scale up its production and exploration activities at the A1 gold mine, we are pleased to have agreed to this proposed divestment of the company’s NSW exploration assets as the best option to realise material value for shareholders while allowing the company to focus on its core business,” he said.

“With over 80 documented gold occurrences within the prospect area, Stuart Town represents one of the densest concentration of historical gold occurrences mapped in NSW.”