Red Hill Minerals (ASX:RHI) signed a binding heads of agreement to acquire a 2% gross revenue royalty on the Sandstone project tenements in Western Australia, according to a Monday filing with the Australian bourse.

The transaction involves a AU$4 million cash payment upon completion, with further deferred contingent payments in instalments equal to 50% of the royalty receipts from the first eight quarters of future production from the tenements, the filing said.

The tenements are part of Brightstar Resources' (ASX:BTR) Sandstone project, acquired through a scheme of arrangement with Alto Metals, which was completed in December 2024, per the filing.

Red Hill Minerals shares rose nearly 3% in midday trade Monday.