Mekong Minerals to invest in Southern Gold’s asian assets

THE BOURSE WHISPERER: Southern Gold announced today that it has finalised an earn‐in and shareholders’ agreement with Mekong Minerals whereby Mekong will have exclusive right to earn an interest in Southern Gold subsidiary, Southern Gold Asia (SG Asia), and to manage the activities of SG Asia and its wholly owned subsidiary, Southern Gold Cambodia (SG Cambodia).

Under the Agreement, Mekong will have the exclusive right to earn up to a 70 per cent interest in SG Asia by sole funding US$5.7 million on expenditure of SG Asia and SG Cambodia.

On earning a 70 per cent interest in SG Asia, Mekong will have the option to purchase Southern Gold’s remaining 30 per cent interest in SG Asia.

Mekong has a minimum commitment to spend of US$1.0 million within the first 12 months from satisfaction or waiver of the conditions precedent.

Mekong will earn its interest on a pro‐rata basis for each US$1 million expended and may elect to cease sole funding after it has expended the initial US$1.0 million at which point Mekong’s interest will be proportional to its expenditure at that point.

“Entering into this agreement is consistent with Southern Gold’s intention to focus on exploration, evaluation and development at the Bulong Gold project, Western Australia.”

“Southern Gold looks to undertake this agreement to release value by reducing our operating costs, while maintaining exposure to future upside in Cambodia.” Southern Gold managing director Nanette Anderson explained in the company’s release to the ASX.