Six prospecting licences and an overlying mining licence application will be sold to Pilgangoora Operations and Ngungaju Lithium Operations, which will pay Kairos $10m on completion and $10m in cash or Pilbara Minerals shares once the application is granted.
Kairos will retain the “Main Trend” section of the project that contains a mineral resource estimate of 43 million tonnes grading 1 gram per tonne for 1.38 million ounces over a continuous 3 kilometre zone.
Under the terms of the divestment, Kairos and Pilbara Minerals will have the right to negotiate an agreement in relation to all mineral rights (except lithium and tantalum) over 367 sq km of neighbouring exploration tenements and applications.
This includes an additional 1.4km strike extension of Main Trend to the north-west, with known gold mineralisation including hits of 16m at 2.43g/t gold.
Once an agreement is in place, Kairos will commence a minimum 5,000m reverse circulation and diamond drilling program over the area aimed at identifying higher-grade, near-surface mineralisation to drive resource growth.
Kairos managing director Dr Peter Turner said the sale to Pilbara Minerals was an attractive deal that would create significant value for shareholders.
“The tenure being sold represents a small and non-core part of Mt York,” he said.
“We will retain the Main Trend resource which underpins the project and have access to a further 1.4km of the trend which we know is well mineralised.”
“In the process, we intend to obtain access to all mineral rights to the area with known gold occurrences which has untested exploration potential.”
“We will be targeting accelerated resource growth as part of our upcoming drilling program.”
Kairos chair Zane Lewis said a portion of the consideration payment would be used to systematically grow the Mt York resource and complete the required development studies.
This includes a Mt York scoping study that has commenced with GR Engineering Services after an internal evaluation confirmed the project had “strong potential” to be a high-value and robust gold mine.
“We plan to position Kairos as a key player in the area and drive our business towards a development scenario with significant blue sky upside,” Mr Lewis said.
