Stricklands pockets tidy $61m from sale of Millrose gold project to Northern Star
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Strickland will more than double its investment in the Millrose gold project WA’s world-renowned Yandal Greenstone Belt after reaching a deal to sell it to Northern Star for $61m.
Under the binding sales agreement, major gold producer Northern Star Resources will pay the company in $41m in cash and 1.5 million NST shares as consideration for the project, which currently has a resource of 6Mt grading 1.8 grams per tonne (g/t) gold, or 346,000oz of contained gold.
This includes a $2m initial deposit with the remainder to be paid on completion of the transaction, which will allow Strickland Metals (ASX:STK) to aggressively upgrade its portfolio of existing gold prospects on the Yandal Belt to a standard similar to that of Millrose.
Chief executive officer Andrew Bray said the company was “exceedingly pleased” to deliver such a strong “transformative” outcome for its shareholders as Millrose was purchased for about $10m in mid-2021 and was the subject of a successful 11 month drill program costing about $16m, which translates into a profit of about $35m.
“This transaction leaves Strickland in the highly envious position of having one of the strongest balance sheets in the junior exploration space,” he added.
“We are confident of advancing and upgrading a number of additional gold prospects along strike to a standard similar to Millrose. Horse Well, Cowza and several other prospects will be the immediate focus of upcoming gold exploration programs.
“The company will also be able to expedite some exploration programs around the highly encouraging Iroquois base metal discovery.”
Under the agreement, Strickland will receive a $2m deposit on its execution with the remaining $39m payable on completion, which is expected in no later than 30 days.
It will also receive 1.5 million NST shares which are subject to a 12 month escrow.
Proceeds will be used to advance its Horse Well, Dusk til Dawn, Yandal East, Baxters and Iroquois projects, which are all located within the highly gold endowed Yandal Greenstone Belt and close to Millrose.
Work includes 25,000m of reverse circulation and 3,500m of diamond drilling to advance its Horse Well project, the Cowza prospect within Yandal East, and the Dusk til Dawn projects towards mineral resource status as it did at the Millrose project.
This includes 1,500m of diamond drilling and 5,000m of RC drilling at Horsewell, which already has an Inferred Resource of 5.77Mt at 1.4g/t gold for 257,000oz of contained gold.
Strickland will also continue base metal exploration at the Iroquois zinc-lead project and assess new opportunities.
This article was developed in collaboration with Strickland Metals, 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.