Shares in struggling gold producer Apex Minerals shot up after it announced plans to sell its Youanmi gold project for $15 million and use the funds to bring its flagship Wiluna project back to profitability.
Separately the company also announced an agreement with multi-millionaire prospector Mark Creasy to investigate processing ore from his Bogada Bore project through Apex's Wiluna plant, which has about 500,000tpa of excess capacity.
Under the terms of the Youanmi sale agreement, buyer Infinity Fame Limited will subscribe for $500,000 worth of new Apex shares priced at six cents each, a significant to the company's current trading price, while it completes due diligence on the acquisition.
The due diligence subscription is non-refundable but Apex expects to net $15 million if the sale goes ahead.
"While Apex believes strongly in the potential of the Youanmi Gold Project to be a near term producer it is currently focusing on returning Wiluna to profitability and the funds from this sale will help it achieve that aim," the company said in a statement.
"As previously announced, management does not believe that Youanmi's underlying value is being recognised by the market in Apex's recent share price.
"The successful completion of this transaction will realise this unrecognised value."
Apex's separate agreement to investigate processing Bogada Bore ore is expected to last up to 45 days.
"The Bogada Bore deposit contains sufficient potentially open-pittable refractory gold material that could utilise the Wiluna plant spare capacity for several years," Apex said.
"It is located approximately 50km to the north-east of Wiluna and directly adjacent to the Jundee gold mine owned and operated by Newmont Mining."
Apex said a JORC resource was being completed.Apex shares were up 0.9 cents, or 21.95 per cent, to five cents at 8am after emerging from a trading halt.
The new magazine for a new generation of West Australians.Click here to download »
All the latest market figures from Australia and the world.Click here »
'The West Australian' is a trademark of West Australian Newspapers Limited 2013.
All rights reserved.
Select your state to see news for your area.