Strickland Metals offloads WA Yandal play for $45M to chase Serbian gold

Strickland Metals is cashing in on its Western Australian gold assets by signing a $45 million deal to sell its Yandal project to Gateway Mining.

Strickland Metals (ASX: STK) is cashing in on its Western Australian gold assets by signing a $45 million deal to sell its Yandal project to Gateway Mining (ASX: GML) and handing shareholders a golden bonus in the process.

The landmark transaction sees Strickland offload its entire Yandal tenure package - home to 400,400 ounces of gold at 1.52 grams per tonne (g/t) - in return for 1.5 billion convertible preference shares in Gateway. The deal is based on Gateway’s 15-day volume-weighted average share price of 3 cents per share.

The biggest slice of the cake - 1.2 billion of those shares - will be handed directly to Strickland investors through an in-specie capital return and dividend distribution. Based on current figures, it equates to roughly 53 Gateway shares for every 100 Strickland shares held.

Another key win from the deal is that Strickland will retain 300 million Gateway shares - about 15.7 per cent of the company’s post-deal capital structure, ensuring it still has skin in the game should Gateway strike more gold at Yandal.

By handing over the project and keeping share ownership in Gateway, Strickland has ensured its investors remain part of the project’s exploration journey, without the exploration cost.

To top it off, Strickland’s balance sheet will also get a tidy $9 million post-distribution boost, adding further firepower to its overseas gold and base metals push.

Gateway’s existing Montague project lies just south of Yandal and contains a 10Mt resource grading 1.6g/t for 526,000 ounces of gold. By combining both projects, Gateway’s portfolio will come close to cracking the one million gold ounce mark and create a seamless, gold-rich domain.

Strickland says the move is part of a broader strategic shift, with the company now zeroing in on its flagship Rogozna project. Its ambitions are gaining traction with seven diamond drill rigs hammering away on site as the company pushes to increase the size of its overall resource.

Rogozna currently hosts a jaw-dropping 7.4 million-ounce gold equivalent resource spread across three prospects, Medenovac, Shanac and Copper Canyon.

A fourth, gold-only prospect called Gradina is currently subject to an intense drilling campaign and is expected to post a maiden resource before the end of the year.

With every new hole seemingly bringing in more ounces, especially close to surface, Strickland is eyeing Gradina as an excellent potential low-cost early entry option for full-scale development at Rogozna.

The transaction crystallises significant value for the company from our Australian assets, with plans to distribute the majority of the consideration to Strickland shareholders post completion of the transaction. Strickland is now fully focussed to aggressively pursue exploration and resource growth across our flagship Rogozna project in Serbia, which boasts a substantial 7.4-million- ounce gold equivalent resource.

Strickland Metals Managing Director Paul L’Herpiniere

The Yandal sale deal is still subject to conditions, including regulatory conditions and the assignment of existing joint venture and royalty arrangements.

Investors will have their say on the in-specie distribution at upcoming extraordinary general meetings on both sides, with documents currently being prepared. Both parties say they are confident that completion will follow within the next 90 days.

Strickland has now cleared the decks to aggressively explore and grow Rogozna. With plenty of gold-equivalent tonnes already on the books and upside galore in Serbia’s mineral-rich terrain, the company believes it’s just getting started.

With gold in Australia and a European-scale gold-base metals play in action, Strickland’s dual-pronged strategy could well prove a golden ticket.

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