Kalamazoo Resources, an Australian gold exploration company, has acquired the 1,609km2 Mt Piper gold project in central Victoria, Australia from Coda Minerals.

The consideration for acquiring the gold exploration project is A$300,000 ($2,05,533) in cash and the issuance of 1,525,000 fully paid ordinary shares in Kalamazoo Resources upon completion.

Besides, Coda Minerals will be entitled to a net smelter royalty (NSR) of 1%, which has to be paid on any minerals extracted from the project tenements.

The Australian copper ores company gained ownership of the Mt Piper gold project through its recent acquisition of Torrens Mining. The latter is Coda Minerals’ minority joint venture partner at its flagship Elizabeth Creek copper project located in South Australia.

According to Coda Minerals, despite the prospectivity of the Mt Piper gold project, pursuing exploration of gold in the Victorian goldfields does not align with the company’s strategy. The company said that its focus is instead on putting its resources towards the continued exploration and development of its core base metals portfolio in South Australia and Queensland.

Coda Minerals CEO Chris Stevens said: “The transaction places Mt Piper with an experienced Victorian Goldfields operator, which Coda believes is better placed to maximise the future value potential of this under-explored asset. Coda is fully focused on progressing its flagship Elizabeth Creek and Cameron River copper projects.

“The deal is structured in way that crystallises some upfront cash value while allowing Coda shareholders to retain exposure to future upside in the Victorian Goldfields via a shareholding in Kalamazoo.”

Kalamazoo Resources plans to undertake an initial “low impact” exploration campaign at the Mt Piper gold project after a community engagement process.

The company said that the acquisition aligns with its strategy of purchasing and developing major resource projects with considerable exploration and development potential in Victoria and the Pilbara region.

Kalamazoo Resources chairman and CEO Luke Reinehr said: “Our continued consolidation of highly prospective exploration ground in the Central Victorian Goldfields is enhanced by the ongoing success at the high-grade Fosterville and Costerfield gold mines.

“These projects contain high-grade gold antimony mineralisation near the main fault margin separating the Bendigo and Melbourne Zones and are reported to be the No. 1 and No. 7 highest milled grade gold mines worldwide in 2021, respectively.”

The closing of the deal is subject to ministerial consent and other limited conditions.