Linden Gold has entered into a sale agreement to acquire the Second Fortune Gold Mine (and the wider Linden Gold Project) from Anova Minerals Limited.
The ultimate aim of the agreement is to bring the $9 million asset back into production after the mine was put into care and maintenance in 2017.
The acquisition forms part of Linden’s ongoing strategy to expand its mining portfolio and leadership expertise in successful operation of narrow vein mines, an arguably complex form of gold mining.
As part of the agreement, Anova will divest its wholly owned subsidiary that owns the assets and tenements which make up the Linden Gold Project, including the Second Fortune Mine, in exchange for $9 million in cash and a Net Smelter Return Royalty (NSR).
Terms include an initial $0.5 million deposit, which is to be paid upon signing of the Share Sale Agreement. After the transaction is completed, $4.5 million will be payable. It is anticipated that this will take place on or before September 29, 2020.
Future payment milestones include:
$2.0 million payable in 18 months after completion of the proposed transaction
$2.0 million payable 24 months after completion of the proposed transaction
Further to the cash payments, an NSR of 1.5% on each ounce of gold produced from the Linden Gold Project will commence after a total of 75,000 cumulative ounces of gold have been produced from the Project. This will be capped at a total royalty payable of $1 million.
Following the total royalty payment of $1 million, the NSR will reduce to 1.00% NSR on every ounce of gold produced.
The acquisition of the Second Fortune Project represents an excellent opportunity to extract value from a proven, high-grade gold mine in a strong gold market.
The current schedule for first ore production under Linden Gold’s ownership is set for Q1 of 2021.