RNC buys option on Westgold’s Higginsville in Australia

RNC Minerals (TSX: RNX; US-OTC: RNKLF) has entered an A$50 million purchase option agreement with Westgold Resources (ASX: WGX; US-OTC: WTGRF) to buy the Higginsville Gold Operation in Western Australia’s Kalgoorlie region.

RNC will pay A$4 million in shares for an exclusive 40-day due diligence period. If it exercises its option, the deal would close 30 days later, and RNC would pay Westgold a further A$21 million in shares and A$25 million in cash.

Higginsville comes with a 1.3-million tonnes per year gold mill that RNC says would save 35%, or in excess of $15 per tonne, on processing costs at its nearby Beta Hunt nickel-gold mine, while adding 40,000 to 45,000 oz. gold production in 2019. RNC achieved 94% gold recovery tolling Beta Hunt material at Higginsville in 2018.

Higginsville contains 5.9-million proven and probable tonnes grading 1.92 grams gold per tonne for 367,000 oz. gold. Inclusive of reserves, it contains 3.1 million measured tonnes grading 2.2 grams gold for 220,000 oz. gold, 15.9 million indicated tonnes grading 1.99 gram gold for 1.02 million oz. gold, and 10.6 million inferred tonnes at 1.99 gram gold for 682,000 oz. gold.

The property contains several operating underground and open-pit mines. Westgold primarily mines the Mt. Henry open pit and expects to produce as much as 45,000 oz. gold in 2019 at US$1,000 to US$1,050 per oz. all-in sustaining costs.

RNC shares are trading at 54¢ in a 52-week range of 7¢ to $1.18. The company has a $251-million market capitalization. It recently agreed to a $12-million bought deal financing at 49¢ per share, and says it will use the proceeds to continue drilling and developing Beta Hunt as well as to fund a portion of the Higginsville acquisition should it close the deal.

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1 Comment on "RNC buys option on Westgold’s Higginsville in Australia"

  1. E M Ted Yates | March 28, 2019 at 1:53 pm | Reply

    A well written and complete coverage of RNC’s activities in Australia.

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