Westgold Resources (ASX:WGX) has secured nearly a quarter of a million ounces of gold in its WA home base region through a $6 million deal with Ore Gold.
Ora announced Thursday morning that it had entered into a binding agreement with Westgold, the dominant gold miner in the Murchison region.
The agreement covers a strategic alliance between the two companies, with the primary aim of advancing the development of Ora’s Crown Prince deposit in the Murchison into production via a placement of $6.0 million worth of Ora shares at 4.5 cents each, representing a 15% stake.
As part of the alliance, Ora and Westgold separately agreed to negotiate the terms of an ore purchase agreement covering Ora’s Crown Prince deposit, which boasts a mineral resource of 240,000 ounces at 4.1 grams per tonne of gold.
The deposit is approximately 33 road kilometres from Westgold’s Bluebird Mill near Meekatharra in the Murchison.
Once the alliance is established, Westgold will have the right, but not the obligation, to an Ora board seat and equity participation.
The deal will provide Ora with $8 million in cash and undoubtedly allow it to pursue various prospects, including workstreams at the Crown Prince project.
"The Westgold Transaction provides Ora and its shareholders with a clear pathway to commercializing Crown Prince in the current gold price environment, validates the quality of the deposit, and enables Ora to leverage Westgold’s internal resources, intellectual property, and infrastructure to accelerate the development of Crown Prince," Ora stated in Thursday’s announcement.
Ora says it is working to update the mineral resource estimate for Crown Prince by the September quarter, with preliminary project development and mining proposals already underway.
The proposal will provide Westgold with additional tonnes and ounces for the Bluebird mill, which already processes ore from the underground mine of the same name and the nearby Big Bell mine of Westgold.
