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Troy Resources Limited (TSX:TRY) announced that an agreement has been reached to sell its Sandstone property in the East Murchison region of Western Australia to Southern Cross Goldfields (ASX:SXG), an Australian gold development company.
Troy Resources Limited (TSX:TRY) announced that an agreement has been reached to sell its Sandstone property in the East Murchison region of Western Australia to Southern Cross Goldfields (ASX:SXG), an Australian gold development company.
As quoted in the press release:
Key terms of the transaction include:
- payment of A$5 million of which approximately $2.5 million will be to replace the environmental bonds on the property;
- a 2% uncapped NSR (net smelter return) royalty on all non-nickel production from the site; and
the issue of 43.665 million warrants for Southern Cross shares, equivalent to 15% of the current issued capital of SXG, with a strike price of 10c per share and a term of 5 years.
Paul Benson, CEO of Troy, commented:
We are very pleased to have reached this agreement with Southern Cross Goldfields. This is a perfect example of a win-win outcome. By being able to utilise the Sandstone plant, SXG will be able to accelerate the development of their exciting Marda development, located north of Southern Cross, for a lower capital cost and add the resources on the Sandstone property to their inventory.
For Troy shareholders, the transaction will realise cash plus royalties on future production from the Sandstone property while at the same time maintaining exposure to Western Areas’ ongoing nickel exploration programs.
In addition, Troy will emerge with a significant interest in Southern Cross Goldfields as it moves towards commencement of gold production at Marda, benefiting from the growth and re-rating of that company going forward.
Click here to read the full press release.
