Firefly Resources has entered into a binding terms sheet with Forrestania Resources to divest its fully-owned Forrestania Gold Project in Western Australia (WA) to the latter.

The consideration for the transaction is the issue of shares worth AUD1.25 million in either the initial public offering (IPO) or RTO Entity, a cash payment of AUD 50,000, plus a milestone payment of AUD 500,000 worth of shares.

The milestone payment will be subject to the definition of a JORC 2012 Mineral Resource of at least 250,000oz of gold at over 2g/t Au and the granting of a 1% Net Smelter Return Royalty overall minerals produced from the project’s tenements.

The Forrestania Gold Project is located 380km east of Perth.

Firefly Resources is divesting the gold project after a strategic review of its assets outside of the flagship Yalgoo Gold Project and the Paterson Copper-Gold Project in Western Australia.

Its review has led to a decision to demerge its fully-owned Oakover Manganese Project in Western Australia to Firebird Metals, a new manganese-focused exploration company, which is slated to list on the ASX shortly after a successful IPO.

Firefly Resources’ tenure at the Forrestania Gold Project is made up of more than 1,000 square kilometers of tenements.

The project tenements are focused on the southern Forrestania Greenstone Belt that is home to the historic Bounty gold deposit, the producing Flying Fox and Spotted Quoll nickel mines, and the recently discovered Earl Grey lithium deposit.

Over the last couple of years, Firefly Resources had carried out limited lithium and gold-focused exploration activities across its tenement package. These led to the discovery of a couple of new structural gold positions at Gemcutter and Crossroads in areas that were previously overlooked, said the Australian gold exploration company.

However, Firefly Resources has shifted its focus to the more advanced Yalgoo Gold Project, which it had acquired in mid-2020. The company’s board ruled that its financial and management resources should continue to be centered on advancing the Yalgoo Gold Project while also starting initial exploration programs at the Paterson Copper-Gold Project.

Simon Lawson – Firefly Resources Managing Director said that the proposed sale of the Forrestania Gold Project is an opportunity to generate value from another non-core asset, while making sure that the management time and resources continued to be focused on the Yalgoo Gold Project.

Simon Lawson said: “While we believe the Forrestania greenstone belt offers huge upside from a gold exploration perspective, we believe this asset is better placed in the hands of another explorer with the time, resources strategic focus required to unlock its discovery potential.

“We are pleased to have reached agreement with the well-regarded team at Forrestania Resources to divest the project through a transaction that will ultimately deliver Firefly a stake in a new gold IPO or RTO, providing our shareholders with exposure to future discovery success.

“We look forward to working with the Forrestania Resources’ team to satisfy all the conditions required to complete this transaction, and to becoming a shareholder in what we hope will be a very successful new ASX-listed gold company.”

  Australia, Firefly Resources, Forrestania gold mine, Forrestania Resources, Gold mining news, Paterson Copper-Gold Project, Simon Lawson, Western Australia, Yalgoo Gold Project