PERTH (miningweekly.com) - The share price of ASX-listed Bass Metals soared by 160% on Wednesday on news that the company will sell off its subsidiary Hellyer Mill Operations (HMO) to clear its debt and relaunch exploration work.

The miner told shareholders that it had entered into a binding heads of agreement with private company Ivy Resources to sell off HMO for A$11-million, with the first A$6-million installation already received.

The balance of the payment would be made at the conclusion of the transaction, expected by February 20.

HMO owns the Hellyer tails gold resource, a processing plant, the Hellyer mine lease, and has a sublicence agreement with Bass over the Mount Charter gold resource. Following the transaction, Bass would retain exploration and development rights over base metals in the Hellyer mine lease, through a sublease agreement.

Ivy Resources has confirmed that it intended for the Hellyer plant to remain on site, paving the way for Bass to use the plant, subject to Ivy’s development plans.

“This is the culmination of a very difficult process for our creditors and shareholders who have remained supportive despite a false start in September 2012 with a reach by LionGold,” said Bass MD Mike Rosenstreich.

During 2012, the Singapore-listed LionGold Corporation pulled out of a A$13.5-million deal to buy the Hellyer mill operations, with the company claiming that conditions precedent for the completion of the agreement had not been satisfied.

Rosenstreich said on Wednesday that following the Ivy Resource transaction, the company’s board was aiming to relaunch activities to build shareholder value through exploration and the assessment of new projects.

The completion of the transaction was subject to the satisfaction of customary conditions, including Foreign Investment Review Board approval, and the finalisation of a definitive share sale agreement.

Bass shares were trading at a high of A$0.018 a share, up from an opening price of A$0.012 a share.