THE BOURSE WHISPERER: Southern Cross Goldfields (ASX: SXG) has completed the acquisition of the Sandstone gold project from Troy Resources (ASX: TRY), which has provided a healthy boost to the company’s gold resource inventory.
The company said the acquisition enhances its Marda gold project, located near Southern Cross in Western Australia, and moves it closer to its aim of joining the ranks of Australian gold producers.
The Marda gold project already boasts resources totalling 535,000 ounces of gold and has demonstrated potential for exploration to add to its current resource inventory.
The acquisition takes Southern Cross’ global resources to 1.3 million ounces.
Southern Cross said it considers the completion of the Sandstone acquisition to be important for the company, as it emerges from the transaction with a 1.3 million ounce gold resource base across two mining centres, a fit-for-purpose gold plant and camp and two large exploration packages in the Marda and Sandstone regions.
“This transaction leaves SXG in a very strong position as an emerging gold producer,” Southern Cross Goldfields managing director Glenn Jardine said in the company’s announcement to the Australian Securities Exchange.
“Obtaining 100 per cent debt funding for this acquisition is testament to the robustness and high quality of our emerging Marda gold project.
It bodes well for the funding of the development of the project following completion of an independent assessment of the project for short-listed financiers.
“At the same time, the success of our recent exploration activities in the Marda region has highlighted the substantial upside to our base case production scenario through ongoing exploration and project optimisation.
“Our next steps will be to seek updated terms from lending institutions for the broader Marda project development funding.”
The cash component of the Sandstone acquisition is being debt funded through a $7 million finance facility being provided by RMB Australia Holdings.