Spectrum Metals Ltd. said Oct. 16 that it agreed to acquire the Penny West gold project in Western Australia, which consists of two contiguous mining leases covering a total of 878.2 hectares, from Patina Resources Pty. Ltd. and Plateaux Resources Pty. Ltd.

Payment for the property is A$1.0 million in cash and shares, which includes a A$50,000 nonrefundable deposit and the remaining balance to be fulfilled in Spectrum shares, subject to a 21-day due diligence period.

The vendors retain a 0.5% net smelter returns royalty after the first 7,500 ounces of gold recovered from the tenements, with Spectrum holding an option to buy back the royalty for A$750,000.

Settlement of the acquisition, subject to approval from Spectrum shareholders, is expected to take place on or before Nov. 30.

The project has an existing JORC 2012 indicated and inferred resource estimate of 230,000 tonnes at 5 g/t for 36,000 ounces, below the current open pit.

Earlier this month, Spectrum agreed to purchase the First Hit gold mine in Western Australia from tenement owner Mark Wicksteed for A$100,000 cash and by issuing A$100,000 of shares.