ASX-listed Forrestania Resources has entered into a binding heads of agreement to acquire a package of granted mining and prospecting tenements in the Coolgardie region of Western Australia, consolidating its existing Coolgardie Hub footprint.

The acquisition will see Forrestania acquire the respective rights, title and interest in tenements held by Christopher Alan De Courcy Ryder and Lloyd George Holdings Pty Ltd (Gibraltar), which include mining leases M15/60 and M15/193, as well as prospecting licence P15/6203. The tenements host approved and operating vat leaching infrastructure and are located within and adjacent to Forrestania’s existing Coolgardie Hub.

Consideration for the acquisition comprises $2.5-million in Forrestania shares, calculated using the five-day volume-weighted average price (VWAP) preceding execution of the agreement.

In addition, following the announcement of an initial 15 000 oz of Joint Ore Reserve Committee- (Jorc-) compliant gold resources at a 0.5 g/t cutoff from any of the tenements – including existing low-grade stockpiles – further contingent consideration of $40 000 per additional 1 000 oz of Jorc resources will be payable, capped at 150 000 oz. These payments will comprise 50% cash and 50% Forrestania shares, based on the five-day VWAP prior to the relevant JORC announcement.

Forrestania will also grant Gibraltar a 1% gross revenue royalty on all gold mined from the Gibraltar tenements, payable only after 150 000 oz of gold has been mined from the tenement package.The Gibraltar tenements have a long mining history, having been mined since the 1920s, and host numerous historical stockpiles. Forrestania said the acquisition represented a strategic consolidation of prospective tenure close to existing processing infrastructure and supported its regional growth strategy in Western Australia.

“This acquisition continues Forrestania’s disciplined strategy of consolidating prospective tenure around our Coolgardie Hub with specific focus of granted mining tenure. The Gibraltar tenements has been mined since the 1920s and contain numerous historical stockpiles. Importantly, the transaction structure aligns consideration with exploration and acquisition success while preserving capital which can be assigned to advancing Forrestania’s production ambitions across our portfolio of West Australian gold assets," said Forrestania Resources chairperson David Geraghty.

The Coolgardie Hub is located on the western edge of the Coolgardie Domain within the Kalgoorlie Terrane of the Yilgarn Craton. The domain hosts a complex greenstone sequence intruded by granites and is bounded by the Zuleika shear and Ida fault, with several major regional structures known to control gold mineralisation.

Forrestania said the newly acquired tenements, located to the south of its existing tenure, enhance its ability to pursue near-term development and production opportunities within the Coolgardie district.