LCL Resources Reports 831,000oz Gold Resource at PNG Kusi, Seals $10M Colombian Deal
LCL Resources has struck a binding agreement to divest its Colombian projects for A$10 million plus royalties, while unveiling a maiden 831,000-ounce gold resource at its Kusi project in Papua New Guinea.
- Binding Share Purchase Option Agreement signed with Tiger Gold for Colombian assets
- A$10 million cash consideration plus 1% net smelter royalty to LCL
- Maiden JORC Mineral Resource Estimate of 831koz gold at Kusi Gold Project, PNG
- Follow-up trenching at Dada project confirms extensive gold-copper porphyry system
- Cash position of A$2 million at quarter-end with ongoing exploration expenditure
Colombian Divestment Deal Secured
LCL Resources (ASX: LCL) has taken a decisive step to reshape its portfolio by executing a Binding Share Purchase Option Agreement with Tiger Gold Corporation for the sale of its Colombian projects, including the Quinchia and Andes Gold Projects. The deal, valued at A$10 million in cash payments plus a 1% net smelter royalty (NSR), awaits shareholder approval at the upcoming Annual General Meeting scheduled for 30 May 2025.
Under the terms, Tiger Gold will assume management and holding costs immediately upon approval, with staged payments of A$7.5 million within 12 months and an additional A$2.5 million upon first gold production. The transaction is free of conditions precedent, signalling a smooth transition and potential for Tiger to pursue a public listing with LCL’s backing.
Maiden Resource Estimate Boosts PNG Prospects
Meanwhile, LCL’s exploration efforts in Papua New Guinea have yielded a significant milestone. The company announced a maiden JORC-compliant Mineral Resource Estimate at the Kusi Gold Project, part of the Ono Gold Project portfolio. Independent consultancy WSP Australia Pty Ltd reported an inferred resource of 18.3 million tonnes grading 1.42 grams per tonne gold, equating to 831,000 ounces of gold at a 0.5 g/t cutoff.
This skarn-hosted mineralization, associated with a distinctive alteration assemblage, confirms the geological potential of the Kusi deposit. LCL is actively planning further geophysical surveys and drilling to explore deeper targets within the Lower Limestone unit, which historical data suggests may host additional mineralization.
Dada Project Trenching Validates Porphyry System
Complementing the resource announcement, LCL completed a follow-up trenching program at the Dada gold-copper porphyry prospect within the Liamu Project in PNG. The recent fieldwork, supported by helicopter logistics, extended previous findings of intense porphyry veining and alteration. Assay results from five new trenches and multiple pits are pending but are highly anticipated given earlier encouraging grades, including 25 meters at 0.34 g/t gold and 0.27% copper.
Financial Position and Outlook
At quarter-end, LCL held A$2.0 million in cash, having spent approximately A$463,000 on exploration activities and A$191,000 on administration and corporate costs during the period. The company’s strategic divestment of Colombian assets is expected to bolster its financial flexibility and sharpen its focus on advancing its PNG gold and copper projects.
With shareholder approval pending for the Colombian transaction and assay results awaited from recent PNG trenching, LCL is poised for a pivotal phase in its development. The company’s management has recommended shareholders support the divestment, underscoring confidence in the deal’s value and the future growth potential of its remaining assets.
Bottom Line?
LCL’s strategic pivot through asset divestment and resource growth sets the stage for renewed momentum in 2025.
Questions in the middle?
- Will shareholders approve the Colombian asset sale at the upcoming AGM?
- What do the pending assay results from the Dada trenching reveal about the porphyry system’s scale?
- How will LCL allocate proceeds from the divestment to accelerate exploration in Papua New Guinea?