Perth-based gold explorer Gascoyne Resources says the deterioration in market conditions was the reason for backing out of a proposed alliance agreement with Canadian gold miner Monument Mining.
“As a result of the termination, Gascoyne retains control of its advanced gold projects which contain approximately 1.8 million ounces of gold on granted mining leases within Western Australia,” Gascoyne said in a statement.
In September, Gascoyne entered into a heads of agreement with Monument for the sale of a 50 per cent interest in its WA gold projects Glenburgh, Dalgaranga and Egerton for $C25 million.
The agreement would have resulted in a 50:50 joint venture in the projects.
Gascoyne would have managed the jointly-funded exploration phase while Monument would have carried Gascoyne’s share of mine development costs.
As part of the arrangement, Monument was required to purchase $1 million Gascoyne shares at 25 cents per share within five days of the announcement in September, and did so.
Monument will retain the Gascoyne shares acquired.
Gascoyne said the decision to terminate the agreement was a mutual decision between the two companies.
Shares in Gascoyne were 21.1 per cent lower at 7.1 cents per share at 11am.
