Cashed-up Intermin set to spend
Intermin Resources will target further drilling around its Kalgoorlie gold project after banking a $2.5 million cash windfall from selling a minority stake in a gold project near Leinster to Saracen Mineral Holdings.
The deal will see Intermin divest its 10 per cent share of the Lehmans gold joint venture and one solely-held exploration licence tenement to majority owner Saracen, which is looking to affirm its control of the deposits surrounding its Thunderbox gold mine.
The project comprises 14 tenements near the northern Goldfields town of Leinster, and includes the 90,000 ounce Otto Bore deposit, just 9km from the 2.5 million tonnes per annum Thunderbox processing plant.
Intermin has been paid $225,000 up front, with a further $2.25 million to come on the completion of the deal — money Intermin managing director Jon Price said would help back its aggressive exploration push at a string of projects around Kalgoorlie-Boulder.
A 2.5 per cent net smelter royalty covering 58,000oz of production from the project from its 42,000oz mark on could also deliver up to $2.4 million if Saracen makes a decision to mine.
Mr Price said the deal was beneficial for both companies.
“We would just be distracted as a minority partner in a JV like that,” he said. “We would be contributing to the capital, whereas we were free-carried to a decision to mine, and then there would be the resulting challenges of grade determination, having to go up there and be involved in it all. We believe that cash now is a much better result for both of us and we can put that money to good use in Kalgoorlie.”
Intermin controls 562,000oz of gold across its Anthill, Teal and Menzies projects, and is preparing a new resource estimate later this quarter.
Mr Price, whose company has used the proceeds of the small Teal open pit to fund a 60,000m drilling program this year, said the Goldfields exploration industry was operating at a fast pace at the moment. “It’s good for the sector because it means there’s a lot of activity going on and bad for us because it takes longer to get data.”
Intermin shares were last night unchanged at 15¢.
Thunderbox manager Simon Hillyard with Cameron Dowel.