Labyrinth sharpens focus on high-grade Canadian gold projects after selling stake in WA gold mine
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Labyrinth Resources has completed the next step in its transformation, by selling its 50% interest in the Penny’s Find gold mine in WA to JV partner Horizon Minerals.
The move continues the rapid makeover Labyrinth (ASX:LRL) has engineered this year, shifting its focus from small-scale gold resource in Australia to rich, high-grade gold prospects in Canada.
Labyrinth will bank $500,000 in cash and $250,000 worth of Horizon shares from the $1.25m deal, which will also see HRZ take on the final $500,000 payment LRL owes to the mine’s previous owner Empire Resources.
The Penny’s Find deal delivers a three-pronged advantage for Labyrinth, banking cash for working capital and exploration, narrowing its focus and investment on its flagship Labyrinthe and Denain assets in North America.
The company also maintains exposure to upside at Penny’s through its existing stake in Horizon.
The sale “delivers a positive outcome for both parties and, most importantly, for shareholders, aligning with the strategic focus of the company to rapidly explore and grow the resource base of the exciting Labyrinthe and Denain gold projects in Canada,” Labyrinth CEO Matt Nixon said.
“The funds received from the sale will be utilised for working capital requirements and we are pleased to maintain an indirect interest in the future value of Penny’s Find through the equity position in Horizon.”
The deal shows the refined strategy Labyrinth has put in place to sharpen its focus on its highest value assets.
Nestled among some of Canada’s largest gold fields in the Abitibi belt including the 71Moz Timmins deposit, Labyrinth is confident its Denain and Labyrinthe projects boast multi-million ounce potential.
Neither has been substantially explored in over a decade and Labyrinthe already has a non-JORC resource of 2.1Mt at 7.1g/t for 479koz.
Converting that into an Australian standard JORC 2012 resource estimate looms as a major catalyst over the next 12 months.
Labyrinth has already seen early success after starting exploration last month, finding visible gold in an initial 1200m diamond drill program at Denain which has since been extended by an additional 3400m.
The company is also completing geological assessments on the Comet Vale and Golden Lode projects in WA, picked up when the company was known as Orminex, before its transformation and rebrand this year.
This article was developed in collaboration with Labyrinth Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.