Horizon Minerals Ltd (ASX:HRZ) has agreed to sell a number of non-core tenements at the eastern Kalgoorlie project area to Northern Star Resources (ASX:NST) for $3.1 million cash plus royalties on all metals and minerals extracted from the tenure.
The sale will save Horizon more than $400,000 of annual holding costs, reduce administration time and allow better focus on core projects. The agreement is expected to be finalised later this month.
The 62 non-core tenements, spanning 10,170 hectares, have seen only limited exploration and drilling-related activities and no mineral resources or significant results that warrant further work have been returned.
Retains upside to future success
Under the agreement, Northern Star will pay Horizon $3.1 million in cash at completion of the sale, plus potential additional deferred payments. These include discovery payments of $20 per ounce for any JORC-compliant mineral resource located on the tenements, capped at 2 million ounces, and a net smelter royalty of 0.5% on all metals and minerals extracted.
Horizon chief executive officer Grant Haywood said: “We see this as a sound divestment for Horizon in gaining $3.1 million in cash in challenging market conditions.
"It continues our divestment of non-core assets to consolidate our portfolio and lower overheads. Importantly, we retain upside to any future success on the ground being divested through potentially lucrative deferred cash payments for resource discovery and production.”
Horizon will retain nine tenements at the Kanowna South project to the north of the tenements, where recent work has highlighted the potential for significant, new mineralisation in the late-stage Panglo Basin.