GBM Resources (ASX:GBZ) agreed with Pacgold (ASX:PGO) to sell its White Dam gold-copper heap leach project in South Australia for an initial payment of AU$1.2 million and 15 million PGO shares, according to a Monday Australian bourse filing.

The deal also includes a potential subsequent payment of AU$2.2 million upon commercial production of at least 5,000 ounces of gold from White Dam.

The company said it will use to proceeds to advance its Drummond Basin gold assets.

The company added that the stage 1 drilling campaign at its Twin Hills project remains ongoing and is designed to grow the existing resource base and follow-up high-priority extensions at both the 309 and Lone Sister deposits, as well as test new regional targets within the mineralized gold corridor.

GBM Resources' shares fell past 3% in recent Monday trade.