S&P/ASX 200 Index (ASX: XJO) gold stock Capricorn Metals Ltd (ASX: CMM) just delivered a welcome Christmas gift to shareholders of junior resource explorer Tempest Minerals Ltd (ASX: TEM).
Before market open this morning, Capricorn Metals announced that it has entered into a binding agreement with Tempest Minerals to acquire the prospective Yalgoo Project tenement package, located in Western Australia.
As some of that purchase will be funded through a new share issue from Capricorn Metals, shares in the ASX 200 gold stock are down 2% today, trading for $14.48 each.
But it's a different story for the junior resource explorer selling Yalgoo.
Tempest Minerals shares closed yesterday trading for 7 cents and were fetching 10 cents apiece in earlier trade, up 42.9%. After some likely profit taking, at the time of writing, Tempest Minerals shares are changing hands for 9 cents each, up 28.6%.
Here's what's happening.
Image source: Getty Images
ASX 200 gold stock expanding its exploration tenements
Capricorn Metals said it considers the Yalgoo Project to be "highly prospective" for gold mineralisation.
The ASX 200 gold stock has identified several target zones for exploration within the project tenure, which it expects could host economic gold deposits.
On the cost front, Capricorn Metals will pay a total of $4.5 million for the project. Capricorn has already paid $100,000 cash and will pay another $400,000 cash on completion of the deal.
The remaining $4 million will be funded via the issue of Capricorn Metals shares. Those will be valued based on the five-day average over the five trading days prior to the completion date.
The Tempest share price looks to be catching some added tailwinds, as the junior ASX miner will retain ownership of the Iron Tenements. Capricorn will have exploration and development rights in respect of all minerals other than iron ore on the Iron Tenements.
Atop the $4.5 million, the ASX 200 gold stock also agreed to make a maximum of three contingent deferred payments of up to $1.5 million linked to exploration success and commercial development decisions.
"The acquisition of the Yalgoo Project continues the expansion of Capricorn's Mt Gibson exploration footprint and adds highly prospective targets very close to the company's recently acquired Golden Range and Fields Find projects," Capricorn Metals CEO Mark Clark said.
Clark added:
This provides Capricorn with an outstanding exploration opportunity with a view to adding meaningful additional ore sources to MGGP and the region. We look forward to commencing active exploration on the project in 2026.
With today's intraday dip factored in, shares in the ASX 200 gold stock remain up 130.6% year to date.
