THE BOURSE WHISPERER: Kin Mining (ASX: KIN) signed an exclusivity agreement in respect to acquiring the Lawlers processing plant from Gold Fields.
Kin mining said the plant, which has been on care and maintenance for 18 months, has a capacity of approximately 800,000 tonnes a year, making it potentially ideal for use at the company’s Leonora gold project in Western Australia.
If the acquisition proceeds, Kin plans to relocate the plant to the Leonora project.
Kin Mining is planning on annual production of 45,000 ounces to 50,000 ounces based on the Leonora project’s existing JORC Resource of 722,000 ounces.
The company also pointed out that all the material assumptions underpinning annual production targets determined by a recently completed Scoping Study have not materially changed.
A drilling program started at Leonora earlier this month with the aim of upgrading the Inferred portion of the Resource to the Indicated category as the company finalises an updated pre-feasibility study on the Leonora gold project.
“The exclusivity agreement allows Kin time to conduct due diligence and a technical review of the plant,” Kin mining said in its ASX announcement.
“Discussions concerning a sale price will take place upon successful completion of the due diligence.”
Under the terms of the Exclusivity Agreement Kin has agreed to pay Gold Fields $100,000 as a non-refundable fee for the exclusivity rights (Exclusivity Fee).
The Exclusivity Fee will form part of the purchase price and in consideration for the Exclusivity Fee, Gold Fields has agreed that for 120 days, unless extended by written notice by both parties, it will deal exclusively with Kin in relation to the mill and the proposed acquisition and immediately cease any discussion (whether current or past) with any other person in relation to dealing with the mill and the proposed acquisition.
Kin and its employees, agents and contractors will be allowed to complete due diligence investigations with respect to the mill and be given access to all information reasonably necessary to undertake this work.
The Exclusivity Agreement will be automatically extended without a requirement for notice if a Formal Agreement is reached in respect of the Proposed Acquisition.