PERTH (miningweekly.com) – ASX-listed Intermin Resources has struck an A$8-million deal with fellow-listed Kingwest Resources to divest of its Menzies and Goongarrie gold projects, in Western Australia.

Under the terms of the agreement, Kingwest would pay A$3.375-million in cash and A$4.625-million in shares, resulting in Intermin holding a 19.99% interest in Kingwest.

Following the transaction, Intermin would have the right to representation on the Kingwest board, in a nonexecutive capacity, and will have a right to process or purchase any gold-bearing ore from the sale tenements under standard commercial terms.

Intermin MD Jon Price on Tuesday said that the company’s core focus was firmly on developing a standalone gold project in the Kalgoorlie and Coolgardie regions, adding that the divestment of the Menzies and Goongarrie projects supported this objective while retaining exposure to both the projects and Kingwest’s current gold projects in the north-eastern Goldfields.

“The deal is another step in Intermin’s strategy of monetizing assets through mine development or generating value through divestment of lower priority projects to support future growth plans and minimising shareholder dilution wherever possible.”

The two project areas comprise 38 mining, prospecting and exploration licences with a current Joint Ore Reserves Committee-compliant resource of 195 000 oz.

Kingwest on Tuesday said that the projects offered significant exploration upside and production potential, with the company’s focus expected to be on the high-grade, structurally controlled mineralisation which is shown to extend at depth, and on the testing for blind repeating lodes.

The transaction between Intermin and Kingwest was subject to Kingwest completing a A$4-million capital raise, as well as other standard conditions.

Kingwest will undertake a share placement to sophisticated and professional investors, subject to shareholder approval, with the placement to be completed in two tranches.

As part of the transaction, Kingwest will also transition some of its key management and board roles with founding CEO of ASX-listed Galena Mining, Ed Turner expected to take over as CEO of Kingwest.

Founding chairperson of Galena, Adrian Byass, will also be appointed as chairperson of Kingwest, while Price will be joining the Kingwest board as a nonexecutive director.

Peter Benetto will resign as chairperson and director of Kingwest, and Stephen Woodham will step down as CEO, but will remain as a nonexecutive director.