The All Ordinaries Index (ASX: XAO) is down 0.1% today, but this ASX gold stock is flying the other way.
The high-flying company in question is junior gold explorer Focus Minerals Ltd (ASX: FML).
Focus Minerals shares closed on Friday trading for 22.5 cents apiece. In earlier trade, shares just jumped to 60 cents, up an eye-popping 166.6%. After some likely profit-taking, shares are changing hands for 48.5 cents each at time of writing, up 115.6%.
Here's what's catching ASX investor interest on Monday.
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ASX gold stock surges on $250 million mine sale
Investors are piling into Focus Mineral shares after the miner announced that it has entered into a binding Share Purchase Agreement with S&P/ASX 200 Index (ASX: XJO) listed gold stock Genesis Minerals Ltd (ASX: GMD) for the acquisition of Focus Mineral's Laverton Gold Project, located in Western Australia.
Under the agreement, Genesis Minerals will pay an upfront cash consideration of $250 million for the Laverton project. The Genisis Minerals share price is up 1.4% today, at $4.40.
Focus Minerals said that selling Laverton in the current high gold price environment is a strategic decision that it expects to deliver immediate shareholder value. And judging by today's price action, that expectation is proving spot on.
Commenting on the asset sale sending the ASX gold stock rocketing today, Focus Minerals executive chairman Wanghong Yang said:
We are extremely pleased with the outcome achieved in the sale of Laverton and believe the consideration payable represents compelling value to our shareholders.
Proceeds from the sale of Laverton will strengthen the financial position of the company as it continues with development at the Bonnie Vale Underground Mine and open pit mining operations at the Coolgardie Gold Project.
Gensis Minerals' acquisition of Laverton is expected to be completed in early June.
Genesis Minerals expects big results
Genisis Minerals noted that the Laverton Gold Project has a global Mineral Resource of around 4 million ounces at 1.7 grams per tonne of gold. Management noted that the acquisition price equates to a cash consideration of around AU$63 per resource ounce.
The project has Reserves of 546,000 ounces at 1.3 grams per tonne of gold.
The ASX 200 gold stock also cited "substantial scope for Resource growth, with a large tenement package comprising highly prospective gold tenure", with an added advantage that the Laverton mill is only 30 kilometres distant.
"This is the perfect bolt-on acquisition. It delivers a substantial 4-million-ounce Resource with immense exploration upside right next to our Laverton mill," Genesis managing director Raleigh Finlayson said.
