THE BOURSE WHISPERER: Southern Gold (ASX: SAU) announced payment of the seventh profit share distribution from the company’s Cannon gold mine southeast of Kalgoorlie in Western Australia’s Eastern Goldfields.
Southern Gold said the Cannon gold mine operations committee resolved to pay a further $3 million in profit distributions, or $1.5 million to Southern Gold as its 50 per cent profit share.
This takes total payments to Southern Gold from Cannon since December 2016 to $13 million, which has enabled the company to have fully repaid all its debt, leaving its unaudited cash position currently at approximately $6 million.
The final cash distribution to Southern Gold from the now ceased Cannon open pit operations is anticipated to be late in August once all final accounts have been settled.
The company is now waiting to receive results from a Reverse Circulation (RC) drilling campaign completed in July, which it anticipates will assist confirmation of the below-pit gold resource, particularly the distribution of the high-grade zone that drives the economics of the proposal to further develop Cannon as an underground gold mine.
Once a revised gold resource and conceptual underground mine design are finalised and these economic outcomes are confirmed by the latest round of RC drilling, Southern Gold will aim to move forward with the commercial arrangements of underground mining over the course of the next few months.
The company has commenced discussions with various potential development partners to assist in this regard.
“Our cash position is building while at the same time we are active on multiple fronts in Australia and South Korea with both exploration and development drilling,” Southern Gold managing director Simon Mitchell said in the company’s announcement to the Australian Securities Exchange.
“We either have been or are drilling at Cannon, Glandore and Weolyu, with results from these programs expected over the coming months.
“We are actively building additional value in the portfolio and effectively organically funding our exploration efforts.”