Spartan selling non-core gold projects for up to $15.6m

Spartan Resources selling Glenburgh and Egerton gold projects to Benz Mining for up to $15.6m in cash and shares
Company will retain exposure to upside through ~15% stake in Benz
Transaction will allow Spartan to focus on advancing its Dalgaranga project towards production

Special Report: Spartan Resources is selling its non-core Glenburgh and Egerton gold projects in WA to Benz Mining for up to $15.6m in cash and shares to focus on its flagship Dalgaranga project.

Under the binding agreement, Benz Mining (ASX:BNZ) will pay Spartan Resources (ASX:SPR) an initial $1m in cash and 33 million CHESS Depository Instruments worth $8.6m. It will also nab up to an additional $6m in contingent payments if certain milestones are met.

On completion of the agreement, the company will hold ~15% of BNZ and will be entitled to nominate a director to its board.

This allows SPR to retain exposure to any upside in the Glenburgh and Egerton projects.

“The Glenburgh and Egerton projects have undoubtedly suffered from a lack of attention within the Spartan Group in recent years as a result of the incredible success we have enjoyed at Dalgaranga,” executive chairman Simon Lawson said.

“As a result, they are considered non-core within our portfolio given our focus on continuing to rapidly add high-grade ounces and advancing Dalgaranga towards a production restart decision.

“We are therefore pleased to have reached agreement with a funded and well-backed explorer in Benz Mining to give these assets a reinvigorated life.

“With a combined mineral resource estimate of 537,000oz at 1.0g/t Au, Glenburgh and Egerton are exciting growth assets with demonstrated potential for high-grade underground ounces – which is expected to be the focus of Benz’s exploration campaign.”

The Glenburgh and Egerton projects. Pic: Spartan Resources

Lawson noted that the company will remain involved with the two projects, adding that Nick Jolly – a key member of SPR’s geology team associated with the discovery of the Never Never and Pepper high-grade gold deposit – is the company’s proposed nominee to BNZ’s board.

“Spartan will also be providing additional technical support and assistance to Benz given our history with the asset and capitalising on the insights gained at Dalgaranga – where our team have successfully discovered high-grade gold deposits close to historic lower grade open pit deposits,” Lawson added.

Dalgaranga project

SPR is working at a frenzied pace to restart production at Dalgaranga with the high-grade 1.485Moz at 8.07g/t Never Never deposit being at the core of its efforts.

The company hasn’t stopped with exploration though with recent assay results from extensional and infill drilling returning huge intercepts across the Pepper deposit, with 638.75 gram metres – the third-best all-time drill intercepts on a gram to metre basis for Never Never and Pepper – being the standout.

Lawson noted in late September that the results indicate the Dalgaranga is “well and truly moving to the next level as a ‘belt-scale’ high-grade gold system with genuine multi-million-ounce potential”.

Work on the exploration drill drive at Juniper is also underway, which will establish multiple successive underground drill platforms that will allow the company to further define and rapidly grow its existing high-grade gold prospects and explore for even more of the same style of high-grade gold shoots.

This article was developed in collaboration with Spartan 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.