Linden Gold Alliance has established a 50 per cent stake in the Devon gold mine after inking a binding profit-sharing joint venture (JV) with Matsa Resources.
Linden must pay a $4 million cash advance to Matsa Resources as part of the agreement, which is recoupable from Matsa’s share of Devon profits.
Having already paid a $100,000 deposit, the remaining $3.9 million is payable within four weeks of the binding documents being signed.
Linden will carry and fund Matsa’s share of feasibility, development, finance, operational and rehabilitation costs, with these costs also recoupable from Matsa’s share of Devon profits.
Once Linden is repaid the cash advance and carried costs, Matsa is entitled to its 50 per cent surplus interest.
Linden has several deadlines it must meet for the agreement to be upheld, including the delivery of a definitive feasibility study by August 31 2023, proof of funding by September 30 2023, and commencement of mining before the end of the 2023–24 financial year.
Devon was initially trial mined by GME Resources in May 2015 for a period of six months. A scoping study indicates a mining inventory of 265,000 tonnes at 4.64 grams per tonne (g/t) for approximately 37,000 ounces of gold at the mine.
“The 50 per cent interest in the Devon open pit is a welcome addition to our portfolio, which includes the operational Second Fortune underground mine 10km to the south of Devon,” Linden managing director Andrew Rich said.
“Having these two exciting assets on our books allows us leverage operational synergies to potentially add high-grade, low-cost open-pit ounces to our production profile by mid-2024.”
Linden acquired the Second Fortune underground operation from Anova Metals in August 2020 and brought it back into production in April 2021.
Second Fortune is linked to an ore purchase agreement with St Barbara, where St Barbara acquires any ore produced from the mine. Second Fortune has produced 254,000 tonnes of ore since returning to production, amounting to 31,000 ounces of gold.
With the JV now in place, Linden will continue preparations for its initial public offering (IPO) – which it aims to complete in the first quarter of 2023 – and eventual ASX listing.