Strickland Metals shifts focus after $45M equity sale of WA gold project

Intense drilling at Strickland Metals’ recently sold Yandal project in WA’s Yilgarn region laid the groundwork for its impressive 400,400-ounce combined gold resource at the project. Strickland retains a 15.7 stake in the project’s purchaser, Gateway Mining.

Strickland Metals Limited (ASX: STK) will concentrate on gold exploration in Serbia, after finalising the sale of its Yandal gold project, 85 kilometres northeast of Wiluna in Western Australia, to Gateway Mining for $45 million in Gateway equity.

The June 30 deal includes 1.5 billion Gateway convertible preference shares, valued using a 15-day volume-weighted average price of $0.03 per share as of June 25.

Strickland will distribute 80 per cent of the incoming Gateway CP shares to its shareholders, which will convert to ordinary shares post-distribution on August 26.

Shareholders will receive about 53 Gateway shares per 100 Strickland shares, with a record date of August 22. Strickland will retain a 15.7 per cent stake in Gateway with about 300 million of the company’s shares.

This transaction allows Strickland to realise significant value from Yandal’s total combined 8.17-million-tonne gold resource, grading at 1.52 grams per tonne (g/t) gold for about 400,400 ounces. The company can now redirect its full exploration attention to its Rogozna polymetallic project in Serbia.

The large-scale Serbian project primarily features gold and copper, but also has significant quantities of zinc, silver and lead. The skarn-based gold-copper mineralisation system offers the potential for by-product credits from the other metals.

We are pleased to have completed the sale of the Yandal project to Gateway, crystallising significant value for our shareholders and streamlining our asset base as a focused international resource development company. Rogozna is a Tier-1 asset that continues to attract significant global investor attention, underpinned by a substantial 7.4-million-tonne gold equivalent resource with exceptional near-term growth and further discovery potential.

Strickland Metals Managing Director Paul L’Herpiniere

Strickland Metals began exploration of the Yandal region in mid-2021, marking the start of a strategic expansion in the Yandal greenstone belt. The company initially bought the Millrose gold project for about $10 million from Millrose Gold Mines and Golden Eagle Mining.

The project, in the northeastern part of the Yandal-Millrose Greenstone Belt, brought a 6-million-tonne resource grading 1.8g/t gold for 346,000 ounces into Strickland’s portfolio. The project’s proximity to Northern Star Resources’ Jundee operation, about 30-40 kilometres to the east, underscored the strategic value of the largely underexplored asset.

The acquisition was part of a broader consolidation strategy, funded by a $12 million capital raise, which positioned Millrose as a key asset adjacent to future acquisitions.

Drilling campaigns in 2022 led to a significant sale of Millrose to Northern Star for an impressive $61 million in June 2023, reflecting a substantial return on the company’s initial investment and highlighting Millrose’s role in elevating Strickland’s financial and reputational standing.

Following the Millrose acquisition, Strickland quickly expanded its holdings in the Yandal area with the acquisition of the Horse Well gold project around the time of the company’s mid-2021 consolidation phase.

Horse Well became a flagship asset due to its location along the major regional-scale Celia Shear Zone, a geologically significant structure. Initial Horse Well exploration soon revealed a 5.72Mt resource grading 1.4 g/t for 257,000 ounces, across prospects such as Palomino, Warmblood and Filly.

A third key acquisition, Yandal East, was completed in July 2021. Acquired in a joint venture from Renegade Exploration, it lies immediately south of Horse Well and added 60km of untested strike along the Celia Shear Zone, extending Strickland’s total tenure to more than 100km.

Strickland’s planned drilling kicked off in September 2021, aimed at fathoming the area’s potential, and it later identified prospects such as Cowza and the broader Yandal East ground as high-priority targets.

The Yandal tenure grew to span 1780 square kilometres. As the company leveraged the project’s underexplored eastern flank, recent discoveries such as the Dusk ’Til Dawn prospect for 108,900 ounces of gold, saw it emerge with a strengthened balance sheet, a combined inferred 400,400-ounce gold asset and a promising new frontier.

The Yandal acquisitions collectively and progressively transformed Strickland’s fortunes, ultimately setting the stage for Strickland’s latest $45 million sale of Yandal to Gateway. The deal opens another chapter of prosperity for the company.

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