GEAR and EMR will each contribute up to A$70 million in capital to the joint venture.
GEAR intends to fund its share of the funding through existing cash reserves of the group. As at end-September 2019, GEAR’s cash and cash equivalents stood at US$168.4 million ($226.8 million).
The Ravenswood gold mine, which produced approximately 54,000 ounces of gold last year, had a book value of around A$90.76 million and net tangible asset value of around A$61.03 million.
As at June 30, 2019, Ravenswood’s total gold resource stood at 5.92 million ounces, with a total gold reserve of 2.74 million ounces.
GEAR says the joint venture will provide the group with an opportunity to own part of an established gold producing asset with potential in scalability, exploration and aggregation.
Through the joint venture, the group says it is looking to enhance its overall asset portfolio as well as diversify and expand its product suite and geographical presence to include cash flow streams from counter-cyclical precious metals.
As at 12.30pm, shares in GEAR are trading half a cent higher, or up 2.3%, at 22 cents.
Year-to-date, the counter has jumped more than 40% since closing at 15.7 cents on Dec 31, 2019.
