GDM Secures 15% Stake in Adelong Gold Project with $300K Investment
Great Divide Mining has completed its due diligence on the Adelong Gold Project, paving the way for a strategic stake acquisition and operational control aimed at resuming gold production within a year.
- GDM completes detailed onsite due diligence at Adelong Gold Project
- Agreements underway for GDM’s initial 15% stake in Challenger Gold Mines
- GDM to assume operator role with goal to restart production within 12 months
- Potential to increase ownership to 51% upon first gold production
- Adelong Gold retains 49% stake with no cash calls until production
Due Diligence Milestone Achieved
Great Divide Mining (ASX:GDM) has successfully completed a comprehensive and hands-on due diligence process at the Adelong Gold Project in New South Wales. This thorough review included an in-depth examination of all permits and operational aspects, confirming the project's viability and enabling the finalisation of binding agreements with Adelong Gold Limited (ASX:ADG).
The due diligence outcome marks a pivotal step for both companies, allowing GDM to acquire an initial 15% equity stake in Challenger Gold Mines Pty Ltd (CGM), the entity managing the Adelong Gold Project, through a $300,000 investment.
Strategic Partnership and Operational Control
Under the agreement, GDM will take on the role of operator, focusing on the rapid refurbishment and restart of the modern Adelong Gold Plant, originally built in 2016/17. The plan is ambitious: to recommence gold production within 12 months. Achieving this milestone will trigger GDM’s right to increase its ownership to a controlling 51% stake in CGM, while Adelong Gold retains a 49% interest without any immediate capital contributions.
This structure aligns incentives closely, with GDM bearing operational responsibility and investment risk upfront, while Adelong Gold maintains significant exposure to the project’s upside without near-term cash calls.
Project Potential and Resource Expansion
The Adelong Gold Project currently holds a JORC 2012 Resource of 188,000 ounces, with ongoing exploration and feasibility studies aiming to expand this resource base. The project’s location in southern NSW, combined with the relatively recent construction of the processing plant, provides a strong foundation for a swift return to production and potential growth.
Adelong Gold’s Managing Director Ian Holland praised GDM’s hands-on approach and technical capabilities, expressing confidence that the partnership will unlock the project’s full potential and deliver production within the targeted timeframe.
Risks and Contingencies
While the agreement is promising, it includes a critical performance clause: if GDM fails to achieve first gold production within 12 months, Adelong Gold has the right to reclaim full ownership of the project. This safeguard underscores the importance of GDM’s operational execution and the tight timeline for restarting production.
Investors will be watching closely as final documentation is completed and operational plans are implemented, with the potential for the Adelong Gold Project to become a key regional gold producer once again.
Bottom Line?
GDM’s operational execution over the next year will be the true test of this partnership’s promise and the Adelong Gold Project’s revival.
Questions in the middle?
- Can GDM meet the aggressive 12-month production restart milestone?
- What exploration results might expand the current 188,000-ounce resource?
- How will the partnership structure influence future capital requirements and project funding?
