Australian mining company Mungana Goldmines has signed an agreement to sell its mineral rights for the Chillagoe assets in North Queensland to Lucky Metals.

Under the sale agreement, Lucky Metals will also acquire the assets of Kagara relating to the Northern Chillagoe Project, including the shares in its wholly owned subsidiary Mungana.

The total consideration will include a cash component of $50m and a deferred cash or share component comprised of either $8.19m or the equivalent value of shares in a listed entity into which the purchaser has transferred the Northern Chillagoe assets.

Mungana will receive nearly 75% of the sales proceeds.

The transaction will leave Mungana Goldmines debt free and with $15 million in cash.