Shares in KGL Resources Limited (ASX:KGL) have surged more than 30 per cent in morning trade after announcing the sale of its Murchison Gold Project in Western Australia. The gold and base metals explorer, formally named Kentor Gold, has inked the binding sale agreement for a total cash consideration of $15 million.
Managing Director Simon Milroy told FNN the project has been picked up by an overseas company who will make the announcement when they come online. Mr Milroy also noted the company’s cash balance came in at about $10 million at the end of September 2013 and is set to exceed the company’s market capitalisation following the conclusion of the latest deal.
While the transaction is still conditional on regulatory approvals KGL expects to finalise the deal in early February 2014. Proceeds from the sale will be put to the exploration and development of the Jervois copper project in the Northern Territory.
Shares in KGL Resources were trading more than 30 per cent higher at $0.115 following this morning’s announcement.
KGL Resources reported a net loss of $12.2 million in the first half of the 2013 calendar year.