(Sharecast News) - Precious and base metals developer and explorer Greatland Gold has entered into an agreement with the ASX-listed Flynn Gold, it announced on Wednesday, providing Flynn with an option to purchase its Tasmanian tenements at Firetower and Warrentinna for a fee of AUD 0.1m (£0.06m).
It said the option could be exercised during the agreed option period, which would end no later than 30 June next year.
If the option was to be exercised by Flynn Gold, Greatland said it would receive an initial purchase price of AUD 0.2m.
Deferred consideration would also be payable, consisting of AUD 0.5m if a JORC resource of at least 500,000 ounces of gold was announced, and another AUD 0.5m if Flynn Gold obtained a permit to mine over one or more of the tenements.
A royalty equal to 1% on net smelter returns in respect of any production from the tenements would also be payable.
Greatland said Flynn Gold could satisfy the option fee, initial purchase price and deferred consideration in shares.
If that occurred, Greatland said it would enter into a restriction deed over the shares issued, to confirm that it would hold the stock for at least a year from the relevant date of issue, subject to customary carve-outs for takeover events.
"We are pleased to enter this agreement with Flynn Gold in respect of the Firetower and Warrentinna tenements," said managing director Shaun Day.
"Flynn Gold is a local Tasmanian operator seeking to accelerate the advancement of these exploration projects."
Day said the transactions would allow Greatland to focus on its core projects in Western Australia.
"Greatland receives both upfront value and maintains a future economic interest in these projects, providing ongoing exposure to upside outcomes while delivering an excellent result for Greatland shareholders."
At 1155 GMT, shares in Greatland Gold were up 1.37% at 7.4p.
Reporting by Josh White for Sharecast.com.
Greatland Gold (GGP)