Perth-based gold company Dioro Exploration NL has satisfied all conditions in its bid to acquire the South Kalgoorlie gold mining project from Harmony Gold Australia.
Consideration for the acquisition of the South Kal project is approximately $45 million, with Harmony Gold receiving $25 million in cash and 11.43 million Dioro shares for a deemed value of $20 million.
The acquisition of these assets will see Dioro join the ranks of Australia's mid-tier gold producers at a time of record gold prices.
Final settlement is expected to take place by December 5, 2007.
The full Dioro announcement appears below:
DIORO TO SETTLE WITH HARMONY ON A$45M ACQUISITION OF KALGOORLIE GOLD ASSETS
Australian gold company Dioro Exploration NL is pleased to advise that on Friday evening 30 November 2007, the company satisfied all the conditions precedent required to settle the South Kal Sale Agreement and for Dioro to take ownership of the South Kalgoorlie project from Harmony Gold Australia.
Final settlement is expected to take place once funds are transferred from Dioro to Harmony, and Dioro shares are issued to Harmony.
This is anticipated to take place by 5 December 2007. In July Dioro signed a cash and scrip deal with one of the world's largest gold mining companies, Harmony, for the acquisition of its Kalgoorlie gold assets.
The acquisition of these assets will see Dioro join the ranks of Australia's mid-tier gold producers at a time of record gold prices. Consideration for the acquisition of the South Kal project is approximately A$45 million, with Harmony Gold receiving A$25 million in cash and 11.43 million Dioro shares for a deemed value of A$20 million.
The acquisition includes at least 2000 ounces of gold in circuit and $2 million in consumables and approximately $2.2 million for the replacement of certain environmental bonds.
The asset package is located near Kalgoorlie in Western Australia , approximately 50km from the Frog's Leg mine, and has a current production of approximately 80,000 ounces of gold per year.
The South Kal Project includes the operating Jubilee 1.2mtpa mill, three years of reserves at current production rates, and a resource inventory of approximately 1.878 million ounces .
In addition, a large highly prospective tenement package covering an area of in excess of 1100km2 is being acquired.
The acquisition of these assets creates significant synergies with a number of gold projects in the area requiring milling capacity.
These include the ability to process through South Kal's efficient mill, ore from Dioro's 49% of the Frog's Leg mine and from ore reserves to be developed at the nearby Penfold Gold Project, 100 per cent owned by Dioro.
The Frog's Leg deposit is located 50kms from the South Kal Mine operations, and has a total resource of 723,000 ounces of gold of which Dioro's share is 354,000 ounces.
It is anticipated the operation will be in production from early 2008. In addition to these projects and to any new potential reserves developed on the South Kal tenements, the mill is also within a short distance of a number of other gold projects currently belonging to third parties that are likely to be coming into production and needing milling capacity in the next few years.