(MENAFN - ProactiveInvestors - Australia) Straits Resources (ASX: SRQ) plans to sell its Hillgrove Antimony-Gold Mine in New South Wales to Bracken Resources, netting the company A27 million in addition to the 3 million in option payments already received.
The two companies have entered into a binding sale and purchase agreement for the sale of Hillgrove Mines Pty Ltd, the owner of the Hillgrove Mine, after Bracken chose to exercise an option it held over the mine.
Bracken has paid a further option exercise payment of 1 million, bringing total option payments to 3 million.
Under the sale terms, Bracken will also replace 3.9 million in environmental bonds currently provided by Straits in respect of the Hillgrove Mine.
Completion of the sale is conditional only on Bracken obtaining the required FIRB approval.
The sale of the Hillgrove Mine will allow Straits to continue with plans to separate its gold and copper businesses via a demerger of the gold business.
Late last year the company revealed it was undertaking a review of options to refocus its asset portfolio.
Straits plans to split its copper and gold assets and has begun establishing separate entities.
The company believes the value of its copper and gold businesses is not properly recognised in the market and that there is considerable benefit in examining a separation of the copper and gold businesses.
A demerger would potentially enable greater management focus, flexibility and an investment re-rating.
Straits has also previously received expressions of interest from parties considering acquiring its Mt Muro gold mine in Indonesia, where the company is working to ramp up the Mt Muro gold mine to full production in March 2013 to achieve production of 100,000 gold equivalent ounces in the current financial year.