As per the agreed terms, Crest will acquire SQGM in an all cash deal of $6m including a non-refundable deposit of $100,000.

SQGM owns the Comet Vale Gold Project near Kalgoorlie while the deal also includes 1% zinc net smelter royalty owned by Reed over the Nimbus Project.

Commenting on the sale Reed managing director Luke Tonkin said the divesture was necessitated by the company being fully focused on its Meekatharra Gold Operation which is now fully operational.

"This is consistent with the Company’s strategy of realising value for its suite of attractive noncore assets, and concentrating on delivering solid cash flows from Reed’s Meekatharra Gold Operation," added Tonkin.

The agreement is subject to few requisites including completion of due diligence enquiries within 2 months by Crest, raising capital of $13m and seeking approvals from shareholders by June 2013.

Reed will be required to secure necessary approvals from third party consents, and government prior to the execution of the deal.