Redhill Resources (CVE:RHR), precious and base metal explorer, said on Wednesday it received a A$2 million option payment from Mutiny Gold (ASX:MYG), the operator and optionee of Redhill’s Gullewa gold project in Australia.
Last year, an option deal was struck between ATW Gold (CVE:ATW), a unit of Redhill, and Mutiny, for Mutiny to earn a 70 percent stake in the Gullewa property by making scheduled payments totaling A$9.0 million.
Mutiny has paid a total of A$9.0 million to date, and has now fulfilled it’s obligation to earn 70% of Gullewa, Redhill said.
Mutiny, a gold, copper and nickel explorer in Western Australia, can either decide to now enter a 70/30 split joint venture with Redhill, or raise its stake to 100 percent by finishing a positive feasibility study and paying Redhill an additional A$4 million.
If Mutiny chooses to raise its stake, Redhill would retain a 10 percent net profit interest.
The 550 square kilometre Gullewa project rests 450 kilometres north of Perth, in the Yalgoo mineral fields of Western Australia. Gullewa hosts multiple gold deposits of various size and grade, the most significant being the Deflector gold-copper deposit.
Mining infrastructure assets at the Gullewa project includes an 800 tonne per day carbon in leach plant, a licensed tailings disposal facility, a 50-person camp, offices, and workshops.
In addition to Gullewa, Redhill is actively exploring three gold prospects in the historic gold producing Gasgoyne region of Western Australia: the Cobra, McCarthy and Mt. Phillips prospects. It also has two rare-earth projects at the Honey Comb Hills beryllium prospect in Utah and the Morgan rare-earth prospect in British Columbia.
Vancouver-based Redhill’s stock traded flat at 5 cents, while Mutiny Gold fell slightly by 1.32 percent to trade at 8 cents a share.