Beadell buys Brazil project for $70m

Beadell Resources has executed an agreement to buy the Brazilian subsidiary of New York-listed New Gold for $US63 million ($A70 million).

The deal will see Beadell acquire Mineracao Pedra Branca do Amapari, which owns the Amapari gold project in Brazil. The acquisition will be through cash and scrip.

Beadell said the Amapari is a gold development opportunity comprising of a 2.9 million ounce resource which includes a 1.2moz open pit gold resource and 2,500 square kilometres of prospective surrounding tenements.

The acquisition includes existing gold inventory valued at $US7 million and a modern fleet of earthmoving equipment capable of mining 3 million tonnes of ore per annum.

Beadell said that on completion of the acquisition, it will undertake a feasibility study on the construction of a 2-2.5 million tonne per annum processing plant, which is estimated to cost between $US65 million and $US80 million.

Macquarie Bank has been engaged to act as sole arranger for the project finance.

Consideration for the acquisition is $US63 million, comprising of $US17 million in shares and the balance in cash.

Beadell today said it intends to fund the cash component of the acquisition through a $A75 million institutional placement next month. Macquarie Capital Advisers is the lead manager to the placement.

Meantime the Macquarie Fixed Income, Currencies and Commodities Group and Macquarie Capital Group have agreed to subscribe to $5 million each in the placement. Shares have been priced at 25 cents each.

Beadell said it will also raise a further $5 million through a share purchase plan.

Shares in Beadell closed down 1.5c to 28c today.