Kaiser Reef Limited (ASX:KAU) advised that it has entered into preliminary discussions to potentially divest its NSW Stuart Town group of tenements listed below (Stuart Town Project). While Kaiser considers these tenements are highly prospective for gold mineralisation, Kaiser has made the decision to focus on near mine and near production opportunities in its wholly owned Victorian production and exploration assets. It is proposed that Kaiser will retain exposure to the Stuart Town Project with a 10% free carried interest until a Feasibility Study is completed.

The consideration the Company will receive for the divestment is proposed to consist of: a non-refundable deposit of $25,000 payable by the acquirer, Checkmate Minerals Limited (ACN 658 548 522) (ListCo), following execution of a binding agreement; the issue of5,000,000 shares in ListCo and 2,500,000 performance rights in ListCo which will vest upon ListCo delineating a 2012 compliant JORC inferred (or higher) Mineral Resource on the Stuart Town Project, verified by an independent competent person or $500,000, at the election of Kaiser. The divestment is proposed to be subject to conditions precedent including: completion of due diligence on the Stuart Town Project by ListCo; ListCo completing a seed capital raising; ListCo receiving firm commitments for a capital raising via the issue of shares at not less than $0.20 per share to facilitate an application to list on ASX; ListCo receiving written confirmation from the ASX to have its securities listedon the ASX; any necessary regulatory or governmental approvals required by Kaiser and ListCo entering into other agreements in relation to its proposed ASX listing.