THE BOURSE WHISPERER: Southern Gold has signed a Letter of Intent with Trafford Resources that will result in the latter purchasing the former’s 51 per cent interest in the Western Gawler Craton JV with Dominion Gold Operations (a 100 per cent owned subsidiary of Kingsgate Consolidated) and its 100 per cent-owned Challenger West tenement.
“Trafford is very well placed to take advantage of the exploration boom in South Australia,” Trafford Resources managing director Ian Finch said in the announcement of the deal to the Australian Securities Exchange.
“Together with its 2,692 square kilometre Wilcherry Hill project on the Eyre Peninsula and this Western Gawler Craton project Trafford now has greater than 8,300 square kilometres of Gawler Craton to define and develop targets.
“The Gawler Craton has produced a number of world class deposits such as Olympic Dam, Prominent Hill and Challenger Gold Mine and there is no reason why it cannot be repeated.”
Map of Trafford’s Western Gawler Craton project. Total area covered is 5,653Kmsqkm. Source Southern Gold announcement
Under the sale terms Trafford will pay $500,000 cash for the Challenger project plus three million Trafford shares, which will be subject to a 12 month voluntary escrow period.
Once a decision is made to conduct a feasibility study on a JORC resource of over 500,000 ounces of gold, Trafford will issue a further $1 million worth of its shares to Southern Gold or its nominee.
“Entering into this Agreement is consistent with Southern Gold’s intention to focus on exploration, evaluation and development at the Bulong Gold project, Western Australia, where recent results show continued high grade gold hits,” Southern Gold Managing Director Nanette Anderson said.
“Southern Gold looks to undertake this Agreement to release value from the sale of this asset and by reducing its operating cost while maintaining exposure to potential upside at the Challenger project.”