Northern Manganese (ASX:NTM) is acquiring a 51% stake in the Redcliffe Gold Project (RGP) in Western Australia’s Eastern Goldfields region that has potential for near term production from Redcliffe Resources (ASX:RCF).
It has also entered into an agreement with Redcliff Resources.
The company is paying $260,000 and 13,888,889 NTM shares as consideration for the stake in RGP, which has a Resource of 278,100 ounces of gold over eight deposits.
RGP is located approximately 40 to 55 km north-east of Leonora and encompasses granted mining leases of an area of 47 square kilometres.
There are a number of plants in the genera area, raising the potential for third party processing of RGP ore.
Northern Manganese has the potential to increase its interest in the project to 85%.
Under the proposed merger, Redcliffe shareholders will receive one NTM share for every 2.75 RCG shares held.
This is represents a 23% premium based on the Volume Weighted Average Price of both NTM and RCF over the last three months.
Shares in NTM last traded at $0.013 while RCF last traded at $0.005.
