(Sharecast News) - Highland Gold Mining has agreed to the sale of the Kayenmivaam, or 'Kayen', licence for $15m in cash, plus a royalty, it announced on Tuesday.
The AIM-traded company described Kayen as an early-stage gold exploration property, covering 1,214 square kilometres in the Chukotka region of Russia.
It explained that it received the licence as an add-on to the Valunisty acquisition in December 2018.
The site's distance from the Valunisty mine, and from the firm's main development project at Kekura, precluded any operational synergies, with the project considered to be a non-core asset.
Highland Gold said it agreed to sell its wholly-owned subsidiary SVGGK, holder of the Kayen license, to an unnamed, unrelated party, for $15m to be paid in two equal instalments.
The first would be at closing, and the second would come following the legal transfer of shares.
In addition, the company said it would receive a 2% royalty on gold produced and sold from the deposit in excess of 500,000 ounces, for a period of 30 years.
The transaction would be subject to approval by Russia's Federal Antimonopoly Service, and was expected to be completed later in the year.
"The structure of the deal ensures that Highland Gold receives an immediate cash payment in a capital-intensive year during which the company is investing in the construction of Kekura and the completion of improvement projects at the Belaya Gora and Novoshirokinskoye mines," the company's board said in its statement.
"At the same time, the company retains an interest in Kayen's upside potential via the royalty on future production from the licence."
At 1023 BST, shares in Highland Gold Mining were up 0.23% at 260p.
22 Apr 2015 07:21