Kingsgate Consolidated has executed a Share Purchase Agreement (SPA) to sell an effective 85% strategic interest in the Bowdens Silver Project near Mudgee in Central NSW, to Silver Investment Holdings Australia Limited (SIHA).
On completion of the acquisition, Kingsgate and SIHA will immediately be associated in an unincorporated joint venture with Kingsgate retaining an initial 15% free carried interest to the point that SIHA meets certain criteria including lodgement of an Environmental Impact Statement, exploration expenditure of A$4 million and completion of a bankable feasibility study.
Kingsgate will receive a total payment of A$20 million cash for the 85% interest in the project of which $200,000 has been received by way of a non-refundable deposit. A further A$1.8 million will be paid upon completion of the due diligence and the remaining A$18 million will be paid by SIHA at deal completion, which is scheduled to occur by June 30, 2016.
Kingsgate’s CEO Greg Foulis said, “This deal is another key part of a strategic portfolio re-alignment for Kingsgate. Following the successful divestment of the Challenger operation, we believe that the time is right to deal with the Bowdens Silver Project.
“In the current market environment, Kingsgate had to choose between two significant feasibility stage projects and the choice was made to focus on the more advanced Nueva Esperanza Project in Chile.”
SIHA’s Anthony McClure said, “We are thrilled to have been able to execute this transaction with Kingsgate. We’ve been evaluating the project for almost 12 months and have worked closely with Kingsgate to reach this agreement.
“We very much look forward to completing the transaction and working alongside the Kingsgate team in the joint venture to realise the value of this unique asset.”
SIHA is a public unlisted company incorporated as a New South Wales specific resources group, with particular emphasis on silver and related minerals. The group delivers considerable expertise across all aspects of exploration, development and financing of resource projects.