Union Star Metals (ASX: USM) has entered into a binding option agreement to sell its Kalgoorlie gold project in Western Australia to Lionex Metals Group. The deal marks a pivot for the company as it seeks to shed non-core assets. Under the terms, Lionex secures an exclusive option period of three months, which can be extended for an additional three months for a fee. The total potential consideration reaches approximately A$890,000, structured to incentivise future project development.

The financial package includes an immediate A$30,000 non-refundable option fee. If Lionex chooses to proceed, a further A$270,000 payment will be triggered upon exercise. Additionally, Union Star retains exposure to the asset's potential through two separate milestone payments of A$285,000 each, which are contingent upon the definition of JORC-compliant mineral resources of 250,000 and 500,000 ounces of gold, respectively, at a minimum grade of 1.2 g/t. The transaction remains subject to customary conditions, including potential shareholder approvals.

This divestment follows a significant shift in the company's capital allocation strategy. In February 2026, the company finalised the acquisition of its flagship Cobb Creek project in Nevada, USA, to accelerate its focus on large-scale gold systems within the Independence Trend. By rationalising its Australian portfolio, Union Star intends to redirect management bandwidth and financial resources toward advancing exploration in the western United States.

"This transaction represents another important milestone in our strategy of rationalising non-core Australian assets and focusing our capital and management effort on our U.S. gold portfolio."

"The proceeds strengthen our balance sheet as we continue advancing Cobb Creek toward becoming a drill-ready project later this year, subject to permitting. At the same time, we retain meaningful upside through the milestone payments should Lionex successfully advance the Kalgoorlie Project." — Lucas Stanfield, CEO

The company is currently prioritising its technical work at Cobb Creek, where integrated geological modeling and geophysics have identified high-priority targets. The capital generated from the Kalgoorlie sale will directly support these activities, including the permitting processes required to initiate a maiden drilling program later this year. This move simplifies the company's asset base, moving away from fragmented regional holdings to concentrate on its core precious metals exploration pipeline. The deal reflects a broader trend of focusing operational capital on high-impact jurisdictions while maintaining passive interest in smaller legacy projects through milestone-based structures.

Read the full announcement: Binding Option Agreement for Sale of Kalgoorlie Gold Project