Saracen acquires Kailis and King of the Hill projects

THE BOURSE WHISPERER: Saracen Mineral Holdings (ASX: SAR) has entered into an agreement to acquire the King of the Hills and Kailis gold projects in Western Australia from St Barbara Limited (ASX: SBM).

The cost for Saracen for 100 per cent of the two projects is $3 million cash in two tranches.

The first tranche involves $0.3 million on completion of the deal, while the second sill result in the remaining $2.7 million on the table on the earlier scenario of either commercial production from Kailis or four years following completion.

The transaction delivers to Saracen Mineral Resources estimated by St Barbara in 2014 of 1.08 million tonnes at 3.3 grams per tonne gold for 114,000 ounces at Kailis, and 1.29 million tonnes at 6.7g/t gold for 279,000 ounces at King of the Hills.

The deal makes se4nse for Saracen with Kailis located just five kilometres from Leonora and 80km south of Saracen’s Thunderbox project.

In the 1990’s Sons of Gwalia mined a small open pit at Kailis yielding reconciled production of 250,000 tonnes at 6.2g/t gold for approximately 50,000 ounces.

King of the Hills is located 65km to the south of Thunderbox and is a mineralised system, which produced approximately 30 million tonnes at 1.9g/t gold for 1.9 million ounces since 1985.

King of the Hills has been on care & maintenance since April 2015.

“The acquisition increases the Mineral Resources within trucking distance of Saracen’s Thunderbox plant by approximately 20 per cent to 2.4 million ounces,” Saracen Mineral Holdings said in its ASX announcement.

Saracen commenced strip mining at Thunderbox in early July and expects commissioning to be completed by the end of June 2016.
 
Once Thunderbox is in production, Saracen anticipates production to double to around 300,000 ounces of gold per annum from the two operational centres at an All-In-Sustainig-Cost (AISC) of less than $1075 per ounce of gold within 2 years.

Email: info@saracen.com.au

Web: www.saracen.com.au