UK-listed explorer Cobra has signed a conditional agreement with ASX-listed Barton Gold to sell its Wudinna gold assets in South Australia for up to A$15-million in cash and shares, allowing it to sharpen its focus on advancing its Boland heavy rare earths project while retaining upside exposure to gold.

The Wudinna gold assets include a 279 000 oz Joint Ore Reserve Committee- (Jorc-) compliant resource, defined in 2023 prior to Cobra’s discovery of ionic-hosted rare earths at Boland.

Under the terms of the deal, Cobra will receive A$0.5-million in cash in two tranches, A$5-million in Barton Gold shares, a further A$2-million in shares contingent on a resource milestone, and up to A$7.5-million in production-linked payments. Cobra will also retain the rights to several critical and strategic minerals across the remaining Wudinna tenements.

“The key to maximising value in small- to mid-size gold deposits is to minimise required capital through utilising existing infrastructure and seeking synergy through scale. This transaction will take Barton Gold's resource to over two-million ounces, with existing infrastructure,” said Cobra MD Rupert Verco.

“It provides Cobra the opportunity to become a significant shareholder in a province scale gold strategy, while enabling us to direct capital and attention to unlocking the value in Boland, which has the potential to become a significant low-cost source of critical terbium and dysprosium for the Western world.”

Barton Gold owns the only regional gold mill in the central Gawler Craton, giving it a processing advantage. The addition of Wudinna lifts its Jorc-compliant gold resource base to over two-million ounces, supporting its ambition of reaching 150 000 oz/y of gold production.

Verco said the transaction strengthened Cobra’s balance sheet and strategic optionality while maintaining exposure to future upside through milestone and production-based consideration.

“As a management team, we are familiar with Barton Gold's projects and have been impressed with its record of growing resources. We believe that by combining these assets, the added scale, increased prospectivity and future synergies will result in a significant South Australia-focused gold producer, accreting value to Cobra's and Barton Gold's shareholders,” he said.

The agreement is subject to several conditions, including the granting of new tenements, finalisation of mineral rights and native title arrangements, and Cobra shareholder approval.

Cobra will retain exploration tenure over the Boland project and continue its strategy to commercialise what it describes as a potentially world-class rare earths opportunity. The company believes that, while Barton is better positioned to extract value from Wudinna’s gold resources and infrastructure, it can best deliver value for shareholders by focusing on critical minerals development.

“The South Australian regulatory framework enabled Cobra to secure 100% of Wudinna project tenure through subdivision; this transaction would not have materialised if that wasn't possible. We are grateful to be operating within a regulatory framework that promotes corporate transactions and appreciate the collaborative efforts of the South Australian Department for Energy & Mining,” Verco added.