Saracen Mineral Holdings (ASX: SAR) advises that it has entered into a binding agreement to sell the Red October gold mine in Western Australia to ASX-listed gold company Matsa Resources Limited (ASX: MAT) for a total of A$2 million*.
Completion of the transaction is anticipated in late October 2017. The transaction remains subject to the conditions. PCF Capital conducted the sale process for Saracen.
Saracen Managing Director Raleigh Finlayson said the sale of Red October was an opportunity to crystallise value from an asset which had become noncore for the Company at a time when it had recorded substantial production and reserve growth.
“We are experiencing outstanding growth at the Karari and Thunderbox mines, located immediately adjacent to the Carosue Dam and Thunderbox mills respectively,” he said.
“While Red October is a high quality asset, its potential as a source of ore is being displaced by the abundance of higher margin ore closer to milling infrastructure. Saracen will retain ongoing exposure to the asset through its shareholding in Matsa, making this an excellent outcome for both parties.”
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