Beadell to become gold producer

PERTH-based explorer Beadell Resources Ltd is about to step into producer status after negotiating a deal with resource investment firm Lion Selection Ltd to acquire the remaining 30 per cent interest in the Cracow gold mine for $80 million.

The deal now allows Beadell to consolidate ownership of the Queensland mine, following an earlier agreement struck with Newcrest Mining Ltd to acquire its 70 per cent interest in the mine for $200 million.

That agreement was conditional on Lion waiving its pre-emptive right to acquire Newcrest's interest, However Beadell announced today that both Lion and Newcrest have waived their respective rights over the joint venture.

Beadell said it plans to undertake a $300 million equity and debt raising to fund both acquisitions, which will be subject to shareholder approval. As part of the Lion deal, Beadell will issue $15 million worth of its shares to Lion, with the remaining $65m to be paid in cash.

Newcrest has agreed, if required, to subscribe to Beadell shares worth the lesser of $50m or 19.9 per cent of Beadell's expanded diluted share capital poste the equity raising.

Additional clauses attached to the Lion deal also include Indophil Resources NL, which has launched a takeover bid for Lion, waives its conditions in relation to the sale of Lion's assets or the bid lapses or is withdrawn.

Lion said it has agreed to provide Newcrest with an option to acquire its 30 per cent shares in Cracow for $80m in cash should Beadell not complete both purchases.

Shares in Beadell, which were placed in a trading halt yesterday pending the announcement, have jumped over 27 per cent in trade this morning, capitalising the company at $21.2 million.