Redhill, Mutiny complete Gullewa property acquisition

Redhill Resources (CVE:RHR) said Friday Mutiny Gold (ASX:MYG) has completed the acquisition of the Gullewa gold project.

Mutiny paid A$4 million to Redhill on December 15, and entered into a deed of variation so Mutiny could acquire the 10 percent net profit interest royalty for 40 million common shares paid to ATW Australia, Redhill’s subsidiary.

The securities issued are subject to a 15 month escrow period. 

Redhill chairman Graham Harris said: "The closing of this transaction provides Redhill with a strong cash position. This combined with its equity interest in Mutiny will give the company the ability to acquire and advance future projects."

On October 24, the company announced that Mutiny opted to earn a further 30 percent – expanding its total stake to 100 percent – if it paid Redhill A$4 million and a 10 percent net profit interest royalty.

Initially, the original agreement called for Mutiny to finish a pre-feasibility study on the property to get the extra 30 percent stake. That agreement was amended earlier last month and as a result Mutiny did not need to complete the report to acquire the remaining 30 percent.

The 550 square kilometre Gullewa project rests 450 km north of Perth, in the Yalgoo mineral fields of Western Australia. Gullewa hosts multiple gold deposits of various size and grade, the most significant being the Deflector gold-copper deposit.

Mining infrastructure assets at the Gullewa project include an 800 tonne per day carbon leach plant, a licensed tailings disposal facility, a 50-person camp, offices and workshops.

In addition to the property, Redhill is actively exploring three gold prospects in the historic gold producing Gasgoyne region of Western Australia: the Cobra, McCarthy and Mt. Phillips prospects.

It also has two rare earth projects at the Honey Comb Hills beryllium prospect in Utah and the Morgan rare-earth prospect in British Columbia.

Shares of Redhill soared 13.33 percent reaching 85 cents apiece Friday in the mid afternoon trading session on Toronto’s junior Venture Exchange.