Linden Gold has entered a Sale and Purchase Agreement with Matsa Resources Limited to acquire both the Devon and Red October Gold Projects for a consideration of $20 million.
Growing company value and the strategic locality of the projects are critical benefits of the acquisition, as the definitive prospects for both the Red October and Devon project, as well as their ideal adjacency to the Company’s Second Fortune Project depict a robust investment landscape.
Linden Gold’s Managing Director, Andrew Rich commented,
“Linden Gold is excited to have signed a binding agreement to acquire Red October and Devon as we move towards an IPO in Q1 2022. The acquisition of Red October and Devon provide additional opportunities to deliver long term growth whilst establishing Linden Gold as an emerging producer in the Laverton Goldfields.
With ramp up of the Second Fortune operation in progress and with the focus now on optimisation, Linden Gold is looking forward to continuing the strategic growth plan with Mako Mining and Multiple Trades and Maintenance who have been central to the success to date.
In addition to the Second Fortune operation and the brownfield exploration potential of Red October and Devon, the greenfield exploration opportunities of the Linden goldfield are extensive, with countless historical underground workings and apparent outcropping quartz systems, many of which have never been explored with modern methods.”
“Our location sits amongst some of the largest producers in Australia and globally provides us an excellent platform to continue our strategic growth plan.”
The agreement consists of a mixture of cash and shares, with key terms including the following:
The Transaction will complete on IPO of Linden Gold which is targeted for Q1 CY 2022.
Under the terms of the SPA, Linden Gold will pay total consideration of $20.0m comprising a $1.0m cash deposit released to Matsa on signing of the SPA.
Upon successful completion of Linden’s IPO, Matsa will receive $5.0 million cash paid from proceeds.
Also upon completion of Linden’s IPO, Matsa will become a substantial shareholder of the company, with a total of $9.0m in shares.
$5.0m in deferred consideration comprising: $2.5m payable 24 months from completion and $2.5m under a 30% Net Profit Interest from the Devon Gold Project (capped at $2.5m).
The Transaction is consistent with Linden Gold’s growth strategy to expand its South Laverton footprint and undertake significant exploration.
Linden Gold pursued the agreement for a variety of reasons that make good business sense. Acquiring the Red October and Devon projects consolidates a portion of the fragmented gold-rich South Laverton goldfields: a world-class exploration package across a 24km long corridor and area of 138km2 covering the historic Linden goldfield, which has been extensively worked in the early 1900s but has seen no modern exploration.
The locality provides scale for an expansive exploration program targeting regionally significant Mineral Resources with key targets identified and drilling to commence mid-December 2021, as well as the opportunity to expand Linden Gold’s operational relationship with St Barbara Limited – with Second Fortune ore currently processed at the Company’s Leonora Operations processing facility.
Linden Gold is additionally able to continue leveraging the capabilities of its existing shareholders / contractors for the provision of underground mining services and mine site establishment and has near term scope to complete study work for mining restarts at Devon and Red October to expand on current production volumes. The Linden Gold team has the requisite skills and support to build new mines efficiently.
Overall, the rapid growth of Linden Gold and its project footprint underpins the motivated and adept team working to establish world-class gold mining operations in a highly prospective region of resource-rich Western Australia.