Genesis Minerals has signed a binding term sheet to sell its Mulwarrie gold project in Western Australia to Labyrinth Resources.
The deal positions Labyrinth as the first owner to consolidate the entire Mulwarrie gold project, a high-grade asset with significant growth potential.
Labyrinth will acquire Admiral Gold, a wholly owned Genesis subsidiary, as part of the deal, which includes two granted mining leases, M30/119 and M30/145, located 150km northwest of Kalgoorlie.
The project boasts a shallow JORC-compliant inferred mineral resource of 0.88 million tonnes at 2.8 grams per tonne (g/t) gold for 79,000 ounces.
Genesis will receive $3.75 million in upfront consideration, settled through the issue of 17.86 million Labyrinth shares at $0.21 per share.
An additional $1 million cash milestone payment will be made upon first commercial production.
“This is a compelling acquisition which aligns with all our stated strategy objectives,” Labyrinth chief executive officer Charles Hughes said. “Mulwarrie has a high-grade resource, is located on granted mining tenure, and has significant resource extension and exploration potential.
Historical drill results at Mulwarrie have delivered standout intercepts, including 5m at 95.3g/t gold, 7m at 22.6g/t gold, and 14m at 12.7g/t gold, showcasing the project’s high-grade potential.
However, there has been no exploration activity recently, with no drilling since early 2019.
Labyrinth has also secured surrounding tenements via a call option with Olympio Metals Limited, unlocking further exploration opportunities.
Genesis’s divestment allows it to become a strategic shareholder in Labyrinth while streamlining its portfolio.
“Labyrinth is acquiring Mulwarrie for the exceptional high-grade growth potential historically constrained by tenure,” Hughes said.
“The acquisition will see Genesis become a strategic substantial holder in the company.”
Completion of the transaction is expected by late November 2024.
Subscribe to Australian Resources & Investment and receive the latest news on commodity prices, resource developments, executive movements and more.