OceanaGold, an Australia-based intermediate gold and copper producer, has signed a sale and purchase agreement with Tasman Mining to sell its stake in the Blackwater gold project (or Snowy River gold mine) in New Zealand to the latter.

Tasman Mining is a fully-owned owned subsidiary of Federation Mining.

According to the terms of the agreement, OceanaGold will receive $30m in cash upon the closing of the deal.

The sale and purchase agreement comes after the receipt of a formal notice from Tasman Mining to exercise its exclusive option on the Blackwater project.

In July 2018, OceanaGold executed a project deed with Tasman Mining for the development of the Blackwater deposit. The deal gave Federation Mining the exclusive right to purchase the gold project once it decides to fully develop the mine.

Tasman Mining succeeded in raising funding to finance the construction of the decline and the company established surface infrastructure.

It also started the development of the twin decline in December 2020. By the end of 2021, Tasman Mining completed 2,800m of decline.

In the following year, Tasman Mining filed applications with Buller District Council and West Coast Regional Council for resource consent amendments to enable onsite ore processing. The applications were granted in January 2023.

According to OceanaGold, nearly 6,500m of development was completed at the Blackwater project by the end of 2022.

Federation Mining managing director Mark Le Messurier said: “We are excited to take this step by exercising of the Project Deed to purchase the asset. This is a project which will bring many benefits to not just our company but also our local community and the West Coast.”

Located near Reefton on the South Island, the Blackwater gold project is within exploration permit EP40 542, covering an area of 4,308ha.

Subject to various conditions including regulatory approval, the deal is anticipated to be completed this year.