said March 31 thatit has signed a binding heads of agreement to sell its Gunga West gold project nearKalgoorlie to Metals X Ltd.for up to A$2.5 million.
Under the agreement,Metals X will pay A$1.5 million in cash up front, a further A$500,000 upon the productionof 10,000 ounces of gold from the project, and a final payment of A$500,000 uponthe production of 30,000 ounces.
Gunga West a resource of 73,000 ouncesof gold grading 1.7 g/t of gold. However, Kidman's agreement to the about 1 million-ounce goldfield forA$3.5 million, combined with strong exploration results and development progressbeing made at the company's nearby Burbanksmine, means that Gunga West has effectively been classed as a noncore asset forKidman.
The companywill combine the proceeds from the sale with its current A$6.5 million to finance furtherproduction strategies at the Burbanks and Mount Holland projects.
Kidman is currentlyworking to upgrade the existing 99,000-ounceresource at Burbanks to underpin a multiyear mine life and is designinga drilling program aimed at upgrading the resource category at the Blue Vein depositat Mount Holland.
Kidman Burbanks and GungaWest in January.