Boab Metals (ASX:BML) will acquire the DeGrussa processing plant for use at its Sorby gold project in Western Australia from Sandfire Resources (ASX:SFR) for a total acquisition price of AU$10 million, according to a Wednesday Australian bourse filing.
It executed a binding sale and purchase agreement with Sandfire. The completion of the deal is conditional upon Boab reaching a final investment decision on the project, anticipated in the second half of the year.
Due diligence by the firm determined that the processing plant is ideally suited for the proposed flowsheet design and production rate for the project.
The acquisition price consists of a AU$1.5 million deposit in cash and shares, AU$6 million payable in cash upon completion, and AU$2.5 million payable in cash on or before 12 months from the sale of the first concentrate from the project.
Boab plans to issue 8.3 million new shares to Sandfire at an issue price of AU$0.12 per share, per the agreement.
Its shares climbed 4% on market close on Wednesday.
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