THE BOURSE WHISPERER: Phoenix Gold has reached agreement with a private vendor to purchase a 100 per cent interest in the Kintore gold project in Western Australia.
The Kintore project adjoins the company’s Castle Hill project situated within its extensive land holding on the Zuleika and Kunanalling shear zones northwest of Kalgoorlie.
The Kintore project and comprises three mining leases and four prospecting licences.
Kintore gold project tenements (green) and Phoenix projects. Source: Company announcement
Phoenix said the acquisition is in line with its strategy to re-consolidate landholdings on what it described as two of the most well-endowed shear zones in the WA goldfields.
“The continued consolidation of this region is fundamental to our strategy of developing a significant mid-tier gold developer and producer in the medium term,” Phoenix Gold managing director Jon Price said in the company’s announcement to the Australian Securities Exchange.
“We look forward to completing the technical work at Kintore to deliver a maiden Resource to add to our growing Resource base.
“Kintore becomes part of the large Castle Hill gold system that is now emerging as a significant and very large new gold camp in the WA Goldfields.”
The vendor has agreed to sell the Kintore project to Phoenix for $800,000 in cash and shares comprising:
– An upfront cash payment of $25,000;
– A cash payment of $375,000 on completion of a formal sale agreement;
– 1.6 million fully-paid ordinary Phoenix Gold shares (at a deemed price of $0.25); and
– A $30 per ounce production royalty on ore produced from the Kintore tenements.
Phoenix said it expects to execute and complete a Formal Sale Agreement in the September Quarter of 2012 subject to any shareholder, government and regulatory approvals that may be required.
The Kintore project has been comprehensively drilled over the last five years but a JORC Resource has yet to be estimated.
Phoenix has undertaken a detailed assessment and is in the process of completing all the required logging, down hole survey, re assaying and data validation to enable a maiden Resource estimate to be generated.
The company indicated this is anticipated to be delivered in the September Quarter of this year.