Minotaur cashes up on Tunkillia sale

THE BOURSE WHISPERER: Minotaur Exploration is six million dollars better off after selling off its share of the Tunkillia gold project in South Australia.

Minotaur said the sale will bolster its cash reserves and support an expanded exploration program through 2012 across its copper-gold tenements in the Gawler Craton of SA and around Cloncurry, Queensland.

The sale will see Minotaur dispose of its 55 per cent share in Tunkillia to ASX-listed resources company, Mungana Goldmines.

It will pay the diversified Adelaide-based explorer $4 million in cash and 3.08 million Mungana ordinary shares.

 

Location of the Tunkillia gold project in South Australia. Source: Minotaur Exploration announcement

 

“Minotaur intends to increase its activity level on all of its copper-gold prospects as these offer substantial upside through exploration success” Minotaur Exploration managing director Andrew Woskett said in an announcement.

“We have numerous drill ready geophysical targets plus new tenements awaiting ground based geophysics for 2012.

“The Tunkillia sale proceeds will therefore help service this expanded exploration spend ensuring Minotaur remains an active on-ground explorer through what is expected to be an extremely tough capital raising environment for juniors in 2012.”

The Tunkillia gold project contains a JORC compliant resource of 15.6 million tonnes at 1.6 ggrams per tonne gold for 803,000 ounces of gold.

The new owner of the project, Mungana Goldmines, said the acquisition marks the next milestone in its strategy to position itself as a mid-tier gold producer over the next 3 years.

Mungana’s flagship project, Red Dome is the current subject of a feasibility study, targeting gold production of 120,000 ounces and copper production of 20,000 tonnes per annum, scheduled for completion in June 2012.

“In assessing the project, Mungana has identified the potential to quickly grow the resource and develop a medium-sized gold mine,” Mungana said in its ASX announcement.

“Post the acquisition, Mungana will remain focused on progressing its Mungana gold project towards production in 2013.

“The company will retain a strong cash position to fund its Bankable Feasibility Study and aggressive exploration program in North Queensland.”

By acquiring the 55 per cent controlling interest in the Tunkillia gold project, Mungana will take over as manager in a Joint Venture with Helix Resources.

Completion of the deal is subject to satisfaction of remaining conditions, including FIRB approval.

Mungana said it is expected to be completed no later than the end of January 2012.