The Board of Pioneer Resources Limited (PIO) is pleased to advise that it has entered into a conditional agreement with Carrick Gold Limited (CRK) for the sale of the western Mt Jewell Project tenements, including the Tregurtha and Hughes Gold Deposits, for total consideration of $8 million.
Pioneer Resources’ Managing Director, Mr David Crook, said that the sale of the western Mt Jewell Project and its gold deposits is a mutually beneficial transaction that importantly delivers significant cash to Pioneer. “This transaction yields much of the return that the Company may have received over the initial production years on a risk-free basis. In addition, the immediate injection of funds enables Pioneer to accelerate drilling and seek further discoveries, and provides real capacity to investigate external opportunities as they arise,” he said.
The $8 million total consideration will be received in four instalments, as follows: the first instalment, comprising $4.5 million, Following the receipt of the first instalment, the Company will have approximately $7 million in cash (and no debt); two instalments of $1.2 million each will be due on 6 March 2013 and 6 March 2014; and a final instalment of $1.1 million will be due on 6 March 2015. The deferred consideration will be secured by way of a first mortgage over the tenements being sold. Pioneer and Carrick are currently negotiating a formal sale and purchase agreement detailing the terms and conditions of the transaction. Total consolidated assets will increase by approximately 27% to $14.5 million.
Pioneer Resources Limited (PIO) is a specialist exploration company searching for gold and base metals in the Kalgoorlie District of Western Australia. The Company strives to create shareholder value by combining work on advanced projects with active project generation from within the Company’s 100%-owned and joint venture tenement portfolio.
