ASX-listed West Wits Mining has entered into an agreement to sell its Mt Cecelia project, in Western Australia, to emerging gold/copper exploration company Aventine Resources.

In a statement to shareholders, West Wits CEO Rudi Deysel says the divestment represents a strategically compelling outcome for West Wits shareholders.

He says the transaction structure delivers immediate and potential future value, while preserving meaningful exposure to exploration success through equity participation and a royalty entitlement.

It also enables the company to focus its capital and operational efforts on advancing the Qala Shallows project, in South Africa, and unlocking the broader potential of its Witwatersrand Basin portfolio.

The transaction also enables West Wits to crystallise value from a noncore exploration asset, while retaining meaningful exposure to future exploration and development success at Mt Cecelia.

As part of the purchase consideration, Aventine will initially issue to West Wits fully paid ordinary shares in Aventine to the value of $2-million.

A further deferred consideration payable to West Wits includes up to $1-million in cash or five-million Aventine shares – if achieved within five years of completion of the transaction – upon definition of a Joint Ore Reserves Committee- (Jorc-) compliant 500 000 oz gold mineral resource, at a minimum cut-off grade of 0.5 g/t.

West Wits says it will also receive a 1% net smelter return royalty on all products extracted from the project, adding that Aventine may buy back 50% of the royalty for $2-million.

Meanwhile, in a quarterly activities report, West Wits says underground development of Qala Shallows and ore delivery from the mine are increasing toward steady-state production.

This follows the maiden gold pour at the mine in March.

“The transition to production at Qala Shallows marks a fundamental shift in the West Wits investment case, with gold production steadily ramping up over the two-year development period to 70 000 oz/y.

“What matters from here is disciplined delivery. Our immediate priority is to convert early production into consistent, reliable output that demonstrates operational stability, cost control and the ability to perform through the cycle,” Deysel says.