Siren Gold (ASX:SNG) announced on Tuesday (November 26) that it has completed the sale of its wholly owned subsidiary, Reefton Resources, to Rua Gold’s (TSXV:RUA,OTCQQB:NZAUF)wholly owned subsidiary Reefton Acquisition.
Reefton Resources is the owner of the Reefton project in New Zealand.
The sale will establish Rua Gold as a dominant landholder in the Reefton region, with approximately 1,196 square kilometers of tenements in the historical and past-producing Reefton Goldfields, which produced over 2 million ounces at 15.8 grams per tonne gold.
According to Siren’s resource update for its Reefton project on September 17, the project’s deposits host a combined inferred JORC compliant mineral resource of 483,000 ounces of gold from ore grading 3.86 grams per tonne gold, as well as 14,500 tonnes of antimony at a grade of 1.7 percent.
Rua will also be positioned as the preeminent gold explorer in New Zealand, with a market capitalisation of approximately AU$41.9 million.
In exchange for Reefton Resources, Rua will pay Siren AU$18 million in shares and a further AU$4 million cash. The cash payments include: forgiving an AU$1 million promissory note upon signing the agreement, an AU$1 million cash payment at completion and the issue of 10,000,000 Siren shares to Rua (or its nominee) at AU$0.20 per share around the completion date.
Once the sale is complete, Siren will have a 26.1 percent stake in Rua, and Rua will hold a 7.51 percent stake in Siren. Rua will also transfer the Langdons antimony-gold project back to Siren.
“Since we listed Siren on the ASX in 2020, the vision has been to consolidate the historical Reefton belt to give it the best chance of bringing the multiple high-grade projects into a central processing hub model,” Siren Managing Director and CEO Victor Rajasooriar said.
Following this transaction, Siren will concentrate on the Sams Creek gold project and the Langdons and Queen Charlotte antimony-gold projects.
For its part, Rua will focus on the exploration and development of the combined Reefton belt. The company completed a C$8 million capital raising in July.
Siren first publicised this transaction on July 15, and the deal was approved by its shareholders on October 28.
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.