Great Boulder Resources Ltd. will acquire the Peak Hill gold project from Aragon Resources Pty Ltd., a subsidiary of Westgold Resources Ltd., a move that will provide a material uplift for Great Boulder’s gold resource inventory and a pathway to capital light gold production in the near term.
The AU$25 million deal sees Great Boulder take 100 per cent control of a high-grade production centre that has previously yielded over 900,000 ounces of gold. The project currently holds a JORC Mineral Resource of 481,000 ounces, significantly boosting Great Boulder’s total gold inventory.
The acquisition will consist of a mixture of a deposit, cash and shares consideration. Great Boulder will issue 391.7 million shares to Westgold, which will give Westgold a 19.9 per cent stake in Great Boulder.
Great Boulder has paid a AU$1 million deposit and the balance of the cash consideration of AU$24 million is payable on completion. Westgold will also receive a 1 per cent net smelter royalty on the production of gold from the project on completion.
The two companies have signed an Ore Purchase Agreement (OPA), allowing Great Boulder to process Peak Hill ore at Westgold’s nearby mills.
This capital-light model avoids the massive cost of building a new processing plant, potentially bringing the project into production within 12 months.
“The acquisition of Peak Hill is hugely transformational,” said Great Boulder Managing Director Andrew Paterson.
“Not only does it add a significant gold endowment to our existing Side Well gold project, but with the ore purchase agreement and support of leading gold producer Westgold Resources, it places us on a pathway to capital light production.’’
To fund the acquisition and exploration program, Great Boulder has secured commitments for a AU$40 million institutional placement.
This leaves the company with a AU$25 million cash balance to execute a massive 60,000-metre drilling campaign using up to six rigs over the next six months.
The exploration will target both Peak Hill and the company’s flagship Side Well Gold Project, located just 100 kilometres away.
A collaboration with Westgold will also explore ways to fast-track development at Side Well, which sits only 25km from Westgold’s Bluebird Mill.
Great Boulder recently appointed industry veteran Chris Tuckwell, the former boss of Australia’s largest open-pit mining contractor, MACA Limited, as Chair.
The company aims to deliver an updated resource estimate for Peak Hill within six months.
