Westgold Strategic Alliance and Placement

Ora Gold Limited (ASX: OAU, Ora or the Company) is pleased to advise it has entered into a binding agreement with Australian gold producer Westgold Resources Limited (WGX:ASX, OTCQX: WGXRF) (Westgold) in relation to a strategic co-operation relationship (Strategic Alliance) and $6.0 million placement (Strategic Placement) (together the Westgold Transaction).

• Ora has entered into a binding agreement with the dominant gold miner in the Murchison region, Australian gold producer Westgold Resources Limited (WGX:ASX, OTCQX: WGXRF) in relation to a:
  • Strategic Alliance with the primary aim of advancing the development of Ora’s Crown Prince deposit into production; and
  • Strategic Placement of $6.0m at $0.0045 per share, equivalent to a fully diluted 15.0% pro forma shareholding in Ora
• As part of the Strategic Alliance, Ora and Westgold to separately agree the terms of an ore purchase agreement
  • Ora’s Crown Prince deposit, which hosts a Mineral Resource of 240koz at 4.1g/t Au1 is located approximately 33km via road from Westgold’s Bluebird Mill
• Upon completion of the Strategic Placement, Westgold to have a right, but not an obligation, to an Ora board seat and equity participation right
• Strengthened pro forma balance sheet of c. $8 million cash and nil debt, allowing Ora to accelerate further resource development, project development and mining proposal workstreams at Crown Prince as well as continue systematic regional exploration across Ora’s commanding 677km2 tenure
• The Westgold Transaction provides Ora and its shareholders with a clear pathway to commercialising 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
• An updated Mineral Resource Estimate at Crown Prince is due for completion in the September quarter and preliminary project development and mining proposal workstreams for Crown Prince are already underway

Ora’s CEO, Alex Passmore, commented: “We are very pleased to announce the Westgold Strategic Alliance and Placement, which provides a short and tangible pathway to production and cash flow from Crown Prince. Ora and Westgold will work collaboratively over the next few months to define the development timetable. This alliance with a large regional operator with extensive processing infrastructure gives us strong confidence in the potential for future economic extraction of other advanced projects within our tenure.

STRATEGIC ALLIANCE

Upon completion of the Strategic Placement, Ora and Westgold agree to enter into a strategic co-operation relationship. The primary aim of the Strategic Alliance will be to advance the development of Ora’s Crown Prince deposit (Crown Prince) into production and any other mining opportunities within the Ora tenure.

As part of the Strategic Alliance, Ora and Westgold will use their best endeavours to agree the terms of a proposed ore purchase agreement, to be agreed and detailed in a separate document negotiated between the parties (OPA). A key term of the OPA will include Ora granting to Westgold a right of first refusal in respect of the future purchase of all ore produced from any tenements owned by Ora (as at the time of the Strategic Placement settlement), to be processed at Westgold’s Bluebird Mill at Meekatharra (Bluebird).

Crown Prince hosts a Mineral Resource of 240koz at 4.1g/t Au1 and is located on a granted Mining Lease with a Native Title Agreement in place. The deposit is located approximately 33km northwest from Bluebird and is easily accessible just off the Meekatharra-Mt Clere public road and the Great Northern Highway, supporting efficient haulage logistics (refer Figure 1).

In addition to the OPA, the Strategic Alliance may also encompass other strategic collaboration initiatives to be agreed on a best endeavours basis such as access to Westgold’s camp and associated facilities and leveraging Westgold’s internal resources and intellectual property to fast track the development of Crown Prince.

Upon completion of the Strategic Placement, Westgold will also have:

• An equity participation right whereby Ora must ensure that Westgold is given at least 10 Business Days’ prior written notice, on a confidential basis, of such a proposal to undertake a prescribed equity offer, being any equity issuance excluding a bonus issue, pro-rata entitlement issue, dividend / distribution plan or employee incentive scheme (Equity Participation Right); and
• The right, but not the obligation, to nominate a representative to serve on the Ora Board in the capacity as a non-executive director while Westgold’s shareholding in Ora remains above 10% (Board Nominee Right).

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