Aurumin Limited (ASX: AUN), an ASX-listed mineral exploration company, has announced a pivotal agreement with Kula Gold Limited (ASX: KGD) for the acquisition of the Mt Palmer Project, located southeast of Southern Cross in Western Australia.

Under the binding term sheet, Kula Gold will acquire a 51 per cent interest in the tenements and mining information of the Mt Palmer Project for A$250,000, payable in shares or cash at Kula’s discretion.

Kula is also committed to investing A$1 million over three years to earn an additional 29 per cent interest.

If Kula chooses not to proceed with the Stage 2 Earn-In or fails to meet the conditions, Aurumin has the option to repurchase a 2 per cent joint venture share in the tenements for $1.00.

The agreement is contingent upon Kula completing due diligence, obtaining all necessary approvals under the ASX Listing Rules for the acquisition, and securing all approvals required under the Mining Act.

If these conditions are not satisfied by June 30, 2024, the agreement may be terminated by the non-defaulting party.

Commenting on the deal, Aurumin’s Managing Director, Brad Valiukas, said: “This is the last of our planned divestments in the Southern Cross area. Subject to successful completions, Aurumin will be positioned with a 20 per cent interest in the Mt Palmer JV, a royalty on the Mt Dimer mining tenements for gold and silver with Beacon Minerals, and the potential future royalty on the Mt Dimer exploration tenements with MinRes.”

Valiukas added: “There still remains significant potential at Mt Palmer, and we look forward to our continuing participation as Kula gives the project the attention it deserves. Aurumin’s focus is now firmly on Sandstone and generating the critical mass required for future production.”