Kin Mining NL (ASX: KIN) has accepted an offer from leading mid- tier gold producer Genesis Minerals Limited (ASX: GMD) for the purchase of tenements hosting 610,000 JORC compliant ounces that comprise part of Kin’s 100%-owned Cardinia Gold Project in WA for $53.5 million in cash and Genesis shares.
Kin has agreed to sell the tenements hosting the Bruno, Lewis, Kyte and Raeside deposits and some associated buildings and miscellaneous licenses, which collectively contain JORC compliant Mineral Resources totalling 610,000 ounces, to Genesis for consideration comprising $15 million in cash and 21,917,532 un-escrowed Genesis shares based on a 5-day VWAP, valued at $38.5 million.
The transaction value equates to approximately $88/ resource oz.
The transaction includes access for Genesis and its operating subsidiaries to some of Kin’s retained tenure to facilitate Genesis operations and Kin retaining access rights over the Kyte and Bruno-Lewis tenements being sold, to enable Kin to continue its exploration over its retained tenements with the Cardinia Gold Project.
On completion of the sale, Kin will hold a total of 39,192,337 Genesis shares valued at $69M (based on a 5- day VWAP of Genesis shares to 13 December 2023) and cash of approximately $17 million for a total of $86 million in cash and liquid assets.
The sale of 610,000oz of Kin’s total Resource inventory of 1.5Moz means the company has an exceptionally strong balance sheet and platform for growth, with the ability to further drill out and increase confidence in the remaining 932,000oz, with the aim of making these ounces attractive to operating processing plants within effective trucking distances.
In addition, Kin has recently completed an exploration review highlighting several promising and some potentially game-changing targets outside of its existing Resource base.
Over the next six months a budget of $5 million has been set aside to test these targets, with expenditure in the subsequent six months to depend on the initial success as well as the level of expenditure required to further drill out the existing Resources.
This is a great deal for Kin and one that resets the bar. The cash will allow us to follow up on some exciting deeper targets, further define our existing Resources and evaluate other growth options. This puts us in a unique position in the junior WA gold sector with the ability to unlock the value of our existing assets, aggressively target new discoveries and participate in future consolidation,” Executive Chair, Rowan Johnston, said.
“We strongly believe in the Leonora consolidation and the work which Raleigh and his team are doing, we look forward to benefiting from this ongoing work through our holding in GMD, and we are exceptionally well placed to continue to ride the Leonora consolidation train and hopefully make further meaningful contributions to that process.”