RNC Minerals Corp (TSE:RNX) said on Tuesday it had exercised the previously announced option to buy the Higginsville mill (HGO) from Westgold Resources Limited -- a move, which will transform the miner's gold operations in Western Australia.
On closing, which is expected around June 10 this year, RNC will pay Westgold A$25 million in cash and A$21 million in shares for a total consideration of A$50 million.
RNC expects to finance the cash component with cash available and additional non-dilutive capital.
"With the completion of our extensive due diligence process, we look forward to completing this transaction," said Mark Selby, CEO of RNC.
"The combination of the Higginsville Mill and our Beta Hunt Mine will transform RNC's gold operations in Western Australia into a multi-mine operation anchored by the 1.3 Mtpa HGO Mill, the exciting high grade and resource potential at Beta Hunt, and a large land position in the Kalgoorlie gold region."
He said that once the deal is closed, the group will begin rapidly integrating Beta Hunt and HGO.
Higginsville lies 57km south of RNC's Beta Hunt mine and 107km south of the regional mining centre of Kalgoorlie.
At Beta Hunt, RNC expects the move to reduce processing cost savings in excess of C$15 per tonne, a 35% reduction.
HGO includes a 367,000 ounce reserve within a 1.2 million ounce measured and indicated gold resource, along with a further 0.7 million ounce inferred resource, which lie on 386 square kilometer land position in the Kalgoorlie gold region.
RNC successfully tolled Beta Hunt material through the HGO mill in 2018, achieving 94% gold recovery.
Shares in Toronto nudged up 1.32% to $0.38.
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