Dynamic Metals has rung the till on another of its non-core gold assets, entering a binding agreement to sell its wholly-owned 100-square-kilometre Lady Jane gold project in Western Australia’s Ora Banda district to First Au.
The deal will see the company pocket $650,000, while retaining a gross revenue royalty of 1.5 per cent over all minerals and locking in an exploration commitment that will see the ground drilled at no cost to the company.
The savvy move comes as the gold price continues to trade at lofty levels above A$6000 per ounce. WA’s gold sector also remains a hotbed for corporate activity, with a string of recent transactions underscoring the demand for well-located ground.
Under the terms of the agreement, Dynamic will receive an initial $50,000 cash payment, followed by $100,000 on completion for the six exploration licences that make up the project. A further $500,000 in deferred consideration is payable on the first anniversary of the deal, which the company can elect to receive as either cash or as First Au shares.
The deal structure looks particularly canny, by ensuring the project doesn’t just sit idle. First Au has committed to a minimum direct drilling expenditure of $250,000 on the project within 24 months of completion. Should First Au fail to meet this commitment, Dynamic has the right to re-acquire the project for just $100,000.
The sale allows the company to realise value while keeping skin in the game through the royalty – a kicker could pay off handsomely should First Au hit paydirt in a proven gold district that already hosts Ora Banda’s 3.7-million-ounce Davyhurst gold operation, just 40 kilometres to the south.
The sale of Lady Jane provides an opportunity for Dynamic to realise value from a non-core part of our portfolio while retaining exposure to future success through the royalty. Importantly, First Au has committed to drilling the Project, allowing Lady Jane to continue to be actively explored without further funding from Dynamic.
The transaction appears consistent with a broader project-generator strategy that has seen Dynamic actively manage its diverse portfolio since listing on the ASX in 2023.
This is the company’s second significant gold asset divestment this year. In August, it struck a deal to sell its Chalice South prospect to Corazon Mining for up to $3.5 million in cash, shares and milestone payments, in addition to a royalty.
The deals have allowed Dynamic to focus its capital and exploration efforts on the company’s highest-priority assets,including its flagship Widgiemooltha gold project between Norseman and Kambalda, which also features a lithium joint venture with mining giant Mineral Resources.
Dynamic recently launched a project-wide gold targeting program across its 800 square kilometres of Widgiemooltha tenure. The review will blend extensive geological, geochemical and drilling data to identify and rank the next generation of priority gold targets. The database also includes intel from drilling at its nearby Cognac West gold-copper prospect, where gold mineralisation was recently confirmed at depth,
The company is also making moves on its Meentheena fluorspar project in the Pilbara, a commodity gaining strategic importance for its use in the semiconductor and battery supply chains.The project’s strategic appeal is underscored by the fact Meentheena is one of only six known fluorite deposits identified by Geoscience Australia.
By farming out, selling down or divesting its non-core ground, Dynamic is proving adept at turning its diverse portfolio into a steady stream of non-dilutive funding and free-carried upside. With the latest deal, it has once again found a way to have its cake and eat it, banking some cash while letting another company’s drill rig test the ground for a future royalty cheque.
Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au