Advance Metals has announced the sale of its Elko coking coal project in Canada, as it looks to focus on exploration and development of its high-grade portfolio in Australia and Mexico.

The sale will be made to Elko Metallurgical Resources Corporation (EMRC), with the transaction from Advance holding the potential to deliver up to C$5.25 million ($A5.4 million) in cash, in addition to long-term royalty exposure.

The divestment marks a strategic pivot for Advance, streamlining the company into what it describes as a focused precious metals growth business.

As outlined in the company’s February 16 announcement, the Elko coking coal project in British Columbia is considered non-core, with limited on-ground work completed since 2018.

Under the deal, Advance will receive staged cash payments tied to permitting and production milestones, as well as an ongoing royalty of up to $US3 per tonne depending on coal prices.

The structure allows Advance to retain exposure to any future upside at Elko without further capital commitments.

Advance managing director and chief executive officer (CEO) Adam McKinnon said the move sharpens the company’s focus on higher-margin precious metals assets.

“The sale of this project to the experienced team at Elko Metallurgical Resources Corporation is a great outcome for Advance’s shareholders,” he said.

“With exceptional drilling results continuing to flow from our high-grade silver and gold assets in Australia and Mexico, this transaction allows us to concentrate our efforts where we see the greatest near-term value creation opportunities.”

In Australia, that focus is already translating into exploration momentum at the Myrtleford project in Victoria’s Goldfields.

In January, Advance reported the discovery of a new high-grade gold structure east of the historic Happy Valley workings.

One step-out hole intersected coarse visible gold in a previously unrecognised quartz vein approximately 100m east of the historic workings, returning 0.6 metres at 66.7 grams per tonne (g/t) gold from 51.3 metres.

The company described the zone as the shallowest gold mineralisation intersected in drilling at Happy Valley to date.

Earlier drilling at depth also delivered strong results, including 3.7 metres at 16.6g/t gold some 140 metres below the previous deepest interval, underscoring the scale potential of the system.

With drilling ongoing along strike and at regional targets, Advance’s Australian portfolio is shaping up as a central pillar of its growth strategy, one now reinforced by the divestment of its Canadian coal asset.

Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.