Forrestania Resources (ASX:FRS) entered into a binding heads of agreement to acquire the Karonie and Lake Rebecca projects in Western Australia from Goldtribe, a unit of Alchemy Resources (ASX:ALY), for a total consideration of AU$5 million, according to separate Wednesday Australian bourse filings.

Forrestania will issue to Alchemy, or its nominee, shares equal to AU$5 million, divided by the 10-day volume weighted average price of Forrestania's shares over the 10 days immediately preceding the date of the agreement. Alchemy will receive 7.7 million fully-paid ordinary shares in Forrestania.

The projects consist of 16 exploration licenses. Alchemy will be awarded a 1% net smelter royalty on all minerals mined from the tenements.

Forrestania's shares climbed nearly 1% in recent trading on Wednesday, while Alchemy Resources' shares jumped 10%.