Sabre Resources signed a binding agreement to sell the Ninghan gold project in Western Australia to Capricorn Metals (ASX:CMM) for an up-front transaction consideration of AU$1.6 million, according to a Thursday Australian bourse filing.

Capricorn has paid a cash deposit of AU$100,000, and the balance will be paid in the firm's shares. It will also grant Sabre a 1% net smelter royalty on all tenements except one, for which the net smelter royalty is 1.5%.

The deal also includes contingent milestone payments worth up to AU$1.8 million, which includes AU$250,000 upon commencement of a drilling program or after 12 months, AU$750,000 upon Capricorn announcing a mineral resource estimate of over 50,000 ounces of gold, and AU$750,000 upon Capricorn announcing a board decision to begin a commercial mining operation on the project.