Global bullion producer AngloGold Ashanti has secured an option to acquire the majority of Matsa Resources’ Lake Carey gold project in Western Australia under a deal valued at A$101-million, subject to certain conditions being met.
The agreement, which follows 12 months of negotiations, grants AngloGold Ashanti an 18-month option period over the project that lies near its Sunrise Dam operations.
Matsa will retain key assets, including the near-term production Devon Pit gold mine, the Fortitude North project, and the Red October Accommodation Village.
Announcing the transaction on Thursday, Matsa executive chairperson Paul Poli said the agreement underscored the value and potential of the Lake Carey project. “This transaction is the culmination of negotiations over the past 12 months with AngloGold Ashanti, and I am thrilled with this outcome. To attribute a value of approximately A$101-million to the Lake Carey gold project speaks volumes for the exploration potential of this project,” he said.
Under the terms of the agreement, AngloGold Ashanti would make an A$8-million non-refundable option fee payment, including A$5-million upon satisfaction or waiver of the conditions precedent. Should the option be exercised, AngloGold Ashanti would pay 1.875% of the gold price multiplied by the agreed resource of 936 000 oz at the time of exercise, minus the A$6-million already paid. Based on the current gold price, this component is valued at about A$73-million. A further A$20-million in deferred consideration would be payable based on future Joint Ore Reserve Committee resources discovered by AngloGold Ashanti post-acquisition, calculated at 1% of the gold price at the time.
Poli said that the agreement allowed Matsa to focus on advancing its retained assets. “This transaction has been a long time in the making. I would like to thank AngloGold Ashanti and their team for the way in which the negotiations were conducted. To have a party of the ilk of AngloGold Ashanti speaks to the true potential value of Matsa’s assets and has attributed a ‘see-through’ value of in excess of A$85 per resource ounce based on the current market gold price.”
The global mineral resource estimate for the Lake Carey project is 949 000 oz at 2.5 g/t, while the reserve estimate is 104 000 oz at 2.4 g/t.
Matsa is subject to a A$0.045-a-share takeover bid, which the board had urged shareholders to reject.