TG Metals (ASX:TG6) signed a sale and purchase agreement to acquire 80% of the Van Uden gold project in Western Australia from Montague Resources, according to a Thursday filing with the Australian bourse.

The transaction consideration comprises an upfront cash payment of AU$2.5 million and the issue of over 5.7 million TG Metals shares worth AU$1 million. The deemed per-share issue price of AU$0.175 is a 67% premium to the closing price of TG Metals on Feb. 28, per the filing.

A further deferred cash payment of AU$500,000 will be paid 12 months after the deal's completion or once an equity raise of at least AU$1 million is completed, whichever occurs earlier.

The deal does not require shareholder approval.

The company will fund the transaction through existing cash reserves.

Barto Gold retains its 20% equity interest in the project.

TG Metals' soared 24% in recent trade.