West Australian company Catalyst Metals buys Henty Gold Mine from Diversified Minerals

The Henty Gold Mine, south of Rosebery, has been sold to Catalyst Metals Limited for $20 million in cash and shares.

In an acquisition report, the ASX listed company announced the purchase from Diversified Minerals.

"Upon completion of the acquisition, Catalyst will immediately commence an optimisation and turnaround strategy via a higher grade, lower volume mining approach, improved technical services input and revitalised exploration to increase the JORC Resources and expand mine life," the report read.

"The company is targeting year one production of approximately 25.0koz on a profitable basis."

The report stated Henty had produced 15 thousand ounces at a loss in the last financial year.

The sale was welcomed by Tasmanian government resources minister Guy Barnett on Monday.

"Catalyst is a financially strong and well-funded company with significant knowledge in exploration," Mr Barnett said.

"The companies' key personnel are well known to the Australian mining industry.

"The Henty Mine currently employs approximately 125 people and is a significant contributor to the West Coast economy and community.

"Catalyst advise that the acquisition will include the transition of the current site operating team."

In January a Queenstown resident was killed in an underground rock collapse at the mine, which shut down operations for several weeks.