Kula Gold Ltd (ASX: KGD) shares are surging higher after the junior gold explorer said potential buyers had approached the company.
Shares in Kula Gold hit a new 12-month high of 5.2 cents on Monday before settling back to be 20.5% higher at 4.7 cents by early afternoon.
The stock has improved from levels around 1.1 cents per share a month ago and from as little as 0.4 cents per share earlier in the year.
Investors who got in at that level would be sitting on more than tenfold gains.
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Possible deal in the wings
The company told the ASX in an announcement on Monday that it had been approached about a potential deal.
Kula Gold Limited advises that it has been approached by a party regarding a potential corporate transaction for Kula Gold. Negotiations are early stage, ongoing, confidential and incomplete. There is no certainty whether a transaction will occur or the terms of any such transaction.
The company stated that shareholders did not need to take any action at this stage and would be kept informed should the matter progress.
Kula Gold has a number of exploration programs, including at its Mt Palmer Project in Western Australia, its Brunswick Lithium Project also in WA, and the Wozi Niobium Project in Malawi.
Other deals on foot
The company announced a potential spin-off of that project into a separate company just last week, allowing it to focus its efforts on finding gold at Mt Palmer.
Kula Gold is scheduled to start a drilling program in Malawi in November, but said that given the potential size of the project, it needed its own dedicated team.
The recent exploration results from Wozi indicate a substantial system that once confirmed with upcoming drilling, will then require a focused team and exploration effort to take the project quickly through to a resource stage and then feasibility studies. Kula is pleased to announce that, subject to drilling results adding to the exploration results to date, its intention to spin off the Wozi Niobium Project into a newly-formed entity, Niobium International Ltd.
Kula shareholders would receive shares in the new company on a pro rata basis.
The company acquired the historic high grade Mt Palmer gold mine in May 2024 and says on its website that the project, last mined in 1944, is highly prospective for new discoveries.
A Phase 2 drilling program is expected to start at Mt Palmer in November of this year.
The company also recently sold its Westonia Project to Forrestania Resources Ltd (ASX: FRS) for $500,000 and a potential future milestone payment of $1 million.
