GoldArc’s Mt Stirling Deal Removes Key Hurdle but Raises Timing Questions
GoldArc Resources has taken a decisive step in advancing its Mt Stirling Project by securing 90% ownership and full operational control, removing the need for a feasibility study before mining decisions.
- GoldArc gains 90% ownership and operational control of Mt Stirling JV
- Elimination of feasibility study requirement before Decision to Mine
- Introduction of drag-along and tag-along rights for streamlined asset sales
- Staged payments totaling A$200,000 plus production and sale bonuses
- Vendors can convert 10% interest to 2% Gross Smelter Royalty or contribute to costs
Strategic Ownership Shift
GoldArc Resources (ASX, GA8) has announced a significant restructuring of its Mt Stirling Project joint venture, securing a commanding 90% ownership stake and full operational control. This move, formalised through a Deed of Variation with the project’s vendors, effectively streamlines decision-making and positions GoldArc as the primary driver of the asset’s future development and potential sale.
Crucially, the agreement grants GoldArc drag-along rights, allowing the company to compel minority vendors to sell their interests under the same terms, while vendors retain tag-along rights to protect their position. This ensures a more cohesive and flexible approach to any future transaction involving the tenement.
Removing Development Barriers
One of the most impactful changes is the removal of the requirement to complete a feasibility study before making a Decision to Mine. This regulatory hurdle often delays project advancement and adds significant upfront capital expenditure. By eliminating this step, GoldArc can pursue faster, more cost-effective pathways to production, potentially accelerating the timeline for bringing Mt Stirling into operation.
Managing Director Paul Stephen highlighted this as a major de-risking milestone, emphasizing the company’s renewed focus on unlocking value and advancing the project efficiently.
Financial and Commercial Terms
The agreement includes a staged settlement payment of A$200,000 to the vendors, split between an initial non-refundable deposit and a completion payment tied to GoldArc’s next capital raise or election. Additional payments are structured around key project milestones, including a A$200,000 mining payment upon Decision to Mine, a A$500,000 production bonus after 20,000 ounces of gold are recovered, and an A$800,000 payment triggered by any sale of the tenement.
Vendors retain the option to convert their 10% free-carried interest into a 2% Gross Smelter Royalty, which would relieve them of future development costs and simplify the ownership structure. This flexibility aligns incentives and clarifies financial obligations as the project advances.
Broader Portfolio Context
Mt Stirling is part of GoldArc’s broader portfolio in the Leonora and Kookynie districts of Western Australia, where the company holds a total JORC resource base of approximately 200,000 ounces of gold. The streamlined ownership and operational control at Mt Stirling could serve as a catalyst for further exploration and development activities across their assets, reinforcing GoldArc’s strategic focus on growth and discovery.
Investors will be watching closely as the company moves towards its next capital raise and subsequent mining decisions, which will test the practical impact of this new agreement on project momentum.
Bottom Line?
GoldArc’s enhanced control and simplified development pathway at Mt Stirling set the stage for accelerated progress, but timing and vendor choices will be key to unlocking value.
Questions in the middle?
- When will GoldArc make its Decision to Mine, and what factors will influence the timing?
- Will the vendors opt to convert their interest to a Gross Smelter Royalty or continue as contributors?
- How will the upcoming capital raise impact the company’s ability to fund Mt Stirling’s development?
