Dynamic Metals Sells Lady Jane Gold Project for $650K While Keeping Royalty
Key Takeaways
- Dynamic Metals has signed a binding agreement to sell its 100%-owned Lady Jane Gold Project in Western Australia's Ora Banda district to First Au Limited (ASX: FAU) for $650,000 in total consideration.
- The deal is structured across three tranches: $50,000 cash on execution, $100,000 cash at Completion, and $500,000 at the first anniversary of Completion — payable in cash or First Au shares at Dynamic's election.
- Dynamic retains a 1.5% gross revenue royalty over all minerals extracted and sold from Lady Jane, preserving financial exposure to any future discovery or production success without further capital outlay.
- First Au is contractually committed to a minimum $250,000 in direct drilling expenditure within 24 months of Completion — and if it fails to meet that obligation, Dynamic holds the right to re-acquire the Project for $100,000.
- The divestment frees Dynamic to concentrate capital on its flagship 800km² Widgiemooltha Project, where the Cognac West gold system has confirmed mineralisation extending to approximately 300 metres depth.
Dynamic Metals strikes deal to offload Lady Jane Gold Project
Dynamic Metals (ASX: DYM) has entered a binding Tenement Sale and Purchase Agreement to divest its 100%-owned Lady Jane Gold Project in the Ora Banda district of Western Australia to First Au Limited (ASX: FAU). The deal is structured for $650,000 in total consideration, while Dynamic retains a 1.5% gross revenue royalty (GRR) over all minerals extracted and sold from the Project, preserving upside in any future exploration or production success.
This is portfolio discipline in action. Lady Jane is a non-core asset, comprising six granted exploration licences, and offloading it allows Dynamic to redirect attention and capital toward higher-priority opportunities, without abandoning the asset entirely.
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Transaction terms: how the $650,000 deal is structured
The consideration is spread across three tranches, giving Dynamic near-term cash flow alongside a meaningful deferred payment. First Au has also committed to a minimum of $250,000 in Direct Drilling Expenditure on the Project within 24 months of Completion, ensuring Lady Jane stays active without costing Dynamic a cent.
| Trigger | Amount | Form of Payment |
|---|---|---|
| Within five business days of execution | $50,000 | Cash |
| At Completion | $100,000 | Cash |
| First anniversary of Completion | $500,000 | Cash or First Au shares (at Dynamic’s sole election, calculated on 20-day VWAP) |
If Dynamic elects to receive First Au shares for the deferred consideration, the share count is calculated using the 20-day VWAP up to but excluding the Completion anniversary date. That share issue is subject to necessary shareholder approvals; if those approvals are not obtained, the deferred consideration defaults to cash.
A meaningful buyer protection also sits in Dynamic’s favour. If First Au fails to meet the $250,000 minimum drilling commitment within 24 months, Dynamic holds the right to re-acquire the Project and associated mining information for $100,000.
Completion remains subject to customary conditions precedent, which must be satisfied or waived within 90 days of execution.
What is a gross revenue royalty — and why does it matter?
A gross revenue royalty (GRR) entitles the holder to a fixed percentage of the revenue generated from minerals extracted and sold from a project, calculated before any costs are deducted. Dynamic’s 1.5% GRR means it receives 1.5 cents in every dollar of mineral sales from Lady Jane, regardless of what it costs First Au to produce them.
This differs from a net smelter royalty (NSR), which is calculated after deducting processing and transport costs. A GRR is typically more valuable to the royalty holder because there are no deductions to erode the payment.
For Dynamic’s investors, the practical outcome is straightforward: the company exits any future funding obligations on Lady Jane but remains financially exposed to any discovery or production success First Au generates. If First Au drills a significant find or brings the project into production, Dynamic participates without spending another dollar on the asset.
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Strategic logic: freeing up capital for flagship priorities
The divestment is consistent with Dynamic’s stated strategy of actively managing its exploration portfolio and directing capital toward opportunities where it can have the greatest impact. The company’s flagship Widgiemooltha Project, covering approximately 800km² between Norseman and Kambalda in Western Australia, remains the primary focus.
The Cognac West gold system at the Widgiemooltha Project, where Dynamic has confirmed mineralisation extending to approximately 300 metres depth, represents the kind of active drilling program the company is redirecting freed-up capital toward following the Lady Jane sale.
The near-term cash inflow from this transaction, $150,000 across the initial payment and Completion tranche, provides a modest but immediate boost to Dynamic’s cash position.
Karen Wellman, Managing Director
“The sale of Lady Jane provides an opportunity for Dynamic to realise value from a non-core part of our portfolio while retaining exposure to future success through the royalty. Importantly, First Au has committed to drilling the Project, allowing Lady Jane to continue to be actively explored without further funding from Dynamic. The transaction further demonstrates our strategy of actively managing the portfolio and directing our capital towards the opportunities where we believe it can have the greatest impact.”
Dynamic’s current capital structure provides context for the scale of this transaction relative to the company’s overall position:
- Share price: $0.60 (as at 1 October 2026)
- Cash (30 June 2026): $1.92M
- Shares on issue: 52.5M
- Market cap: $31.5M
At a $31.5M market capitalisation, the $650,000 consideration is modest in absolute terms. The strategic value here lies less in the headline figure and more in the combination of an immediate cash contribution, an eliminated funding burden, and a retained royalty that keeps Dynamic’s foot in the door should Lady Jane prove its worth under First Au’s drill bit.
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