Old Highway Sale Signals Sandfire’s Shift Amid Regulatory Approval Risks
Sandfire Resources has agreed to sell its Old Highway Gold Project to Catalyst Metals for A$32.5 million, aiming to bolster rehabilitation efforts at its DeGrussa mine and unlock new local opportunities.
- Binding Sale and Purchase Agreement signed with Catalyst Metals
- Total consideration of A$32.5 million including A$2.5 million deposit
- Sale proceeds to support DeGrussa Copper-Gold Mine rehabilitation
- Transaction subject to ministerial and third-party approvals
- Collaborative transfer of DeGrussa aerodrome accountability planned
Strategic Divestment to Fund Rehabilitation
Sandfire Resources Limited has taken a decisive step to streamline its portfolio by signing a binding Sale and Purchase Agreement (SPA) with Catalyst Metals Limited for the Old Highway Gold Project. The deal, valued at A$32.5 million, marks a significant milestone in Sandfire’s ongoing efforts to focus on core assets while responsibly managing environmental rehabilitation costs at its flagship DeGrussa Copper-Gold Mine in Western Australia.
Unlocking Value for Stakeholders
Located approximately 20 kilometres from DeGrussa, the Old Highway Gold Project was extensively explored by Sandfire in the early 2020s but has now been handed over to Catalyst Metals. Sandfire’s CEO Brendan Harris highlighted that the sale not only improves the likelihood of the project’s future development but also promises positive outcomes for traditional owners, local communities, and government stakeholders. The transaction includes a A$2.5 million upfront deposit and a further A$30 million payable upon completion, reflecting strong confidence in the project’s potential under Catalyst’s stewardship.
Navigating Regulatory and Operational Hurdles
The completion of the sale remains contingent on several customary conditions, including ministerial consents under the Mining Act, approvals from third-party counterparties, and the transfer of groundwater well licences. Sandfire and Catalyst have also agreed to collaborate on transferring accountability for the DeGrussa aerodrome, ensuring Sandfire retains necessary access for its ongoing operations. These steps underscore the complexity of mining asset transfers and the importance of regulatory compliance in safeguarding operational continuity.
Implications for Sandfire’s Future
By monetising the Old Highway asset, Sandfire is poised to strengthen its balance sheet and fund rehabilitation obligations, a critical aspect of sustainable mining practices. This divestment may also signal a strategic pivot, allowing the company to concentrate resources on advancing DeGrussa and other core projects. Meanwhile, Catalyst Metals gains a promising gold project with substantial exploration groundwork already completed, positioning it for potential growth in Western Australia’s competitive gold sector.
Bottom Line?
Sandfire’s sale of Old Highway sets the stage for renewed focus and fresh opportunities, but regulatory approvals will be the next critical hurdle.
Questions in the middle?
- How quickly will ministerial and third-party approvals be secured to finalise the sale?
- What are Catalyst Metals’ development plans and timelines for the Old Highway Gold Project?
- How will Sandfire allocate the proceeds beyond rehabilitation costs to enhance shareholder value?
