Sipa Resources Ltd (ASX:SRI) has put the finishing touches on a win-win deal to sell its Murchison Project to Ora Gold Ltd (ASX:OAU) to the tune of A$1.4 million, which it will use to sharpen its focus on other Western Australia-based projects.
Win-win transaction
Total consideration breaks down as A$600,000 in cash and A$800,000 in Ora shares, at a deemed price of 0.6 cents per share.
The agreement specifies that 50% of the total payment has already been received by Sipa, with the remaining balance due in three months.
Additionally, half of the Ora shares are subject to a voluntary 12-month escrow period.
The transaction paves the way for both companies to refine their strategic interests in Western Australia's resource sector.
Exposure retained
Sipa can now channel resources into advancing its other five West Australian gold, battery and base metals projects. Moreover, Sipa shareholders retain exposure to the Murchison Project through the company's shareholding in Ora.
The Murchison Project is contiguous with Ora's existing territory, so it bolsters Ora’s expansion and resource base in the district and aligns well with that company’s recently announced high-grade drill intersections and solidifies its growth plans.
The deal signifies a strategic shift for Sipa, providing capital that could accelerate other high-potential projects in Western Australia, while also keeping its stake in the Murchison Project’s future via its ongoing share in the endeavour.
A great step forward
Sipa Resources managing director Pip Darvall said: “Completion of the sale of our Murchison project to Ora Gold Ltd (ASX:OAU) is a great step forward for both companies.
“For Sipa, it allows us to focus on our five other Western Australian projects, while bolstering the cash balance of the company to support its upcoming exploration programs.
“For Ora, the Sipa tenure will add considerable scale to its existing project. The sale will support Ora’s ambitions to continue building its resource base, to which Sipa retains exposure through its Ora shareholding.”
Read more: Sipa Resources fields more gold and copper results from remaining first-pass aircore drilling at Murchison Project