PERTH (miningweekly.com) - Gold miner Kingsgate Consolidated was selling off its Western Australian and Queensland exploration assets to fellow-listed Caravel Minerals.

The deal would see Kingsgate becoming the largest shareholder in Caravel once the transaction has been completed.

The tenement package under the memorandum of understanding (MoU) would principally comprise exploration areas acquired with the acquisition of Dominion Mining in 2011, with Caravel saying it would add a significant number of highly prospective, drill-ready targets for gold/copper/molybdenum mineralisation in Western Australia, and an open 140 000 oz gold resource in Queensland, which was prospective for additional copper/gold mineralisation.

“These exploration assets have long-term potential, which can best be evaluated in a focused exploration company,” said Kingsgate MD and CEO Gavin Thomas on Wednesday.

“Importantly, our shareholders will continue to benefit from any discoveries or developments made into the future in these areas as Kingsgate will hold 36% of the issued capital of Caravel.”

Under the terms of the MoU, Caravel would issue some 135-million fully paid ordinary shares to Kingsgate, as well as 20-million unlisted options, exercisable at 10c an option, before the end of three years.

The consideration would be paid in full on the date of settlement. Kingsgate would further be entitled to nominate a director to the Caravel board, with Tony Poustie leaving Kingsgate to take up a senior position in Caravel, following the completion of the transaction.

“This acquisition supports Caravel’s strategy to acquire quality projects that have the potential to build significant value for shareholders. We are further pleased to have Kingsgate become a major shareholder and to accept a position on our board,” said Caravel MD Marcel Hilmer.

The completion of the acquisition was conditional upon the completion of a due diligence, as well as shareholder and regulatory approval.