Perth-based Dragon Mining plans to buy the remaining interest in the Weld Range tenements in the Mid West from joint venture partners Minara Resources and the administrators of Sons of Gwalia for $2.35 million.
Perth-based Dragon Mining plans to buy the remaining interest in the Weld Range tenements in the Mid West from joint venture partners Minara Resources and the administrators of Sons of Gwalia for $2.35 million.
Dragon has also entered into an agreement with private company Atomaer Holdings, which can earn up to 60 per cent in the tenements that is known to host iron, nickel, cobalt and platinum group elements.
The tenements are located near the centre of the new iron ore province in the Mid West, with the proposed new rail line from the Oakajee deepwater port to close to the southern boundary of the tenements.
Atomer will pay $500,000 to earn the interest.
Dragon said it is preparing to raise $5 million to help pay for the purchase of the Weld Range tenements and an exploration program.
Dragon added the deal leaves it to focus on its Scandinavian gold assets.
Shares in Dragon fell 0.4 cents to $8.2c at 12:52 AEST.
The announcement is below:
Dragon Mining Limited is pleased to announce that a wholly owned subsidiary, Weld Range Metals Limited
("Weld Range Metals" or the "Company") has entered into an agreement to move to a 100% interest in the Weld
Range Tenements ("Tenements") with the purchase of majority interests from the other joint venture partners
Pilbara Nickel Pty Limited ("Pilbara"), a subsidiary of Minara Resources Limited and Austmin Platinum Mines
Pty Limited (In Liquidation) ("Austmin"), a subsidiary of Sons of Gwalia Ltd (In Liquidation") for total
consideration of $2,350,000.
In February 2008 Dragon Mining entered into an agreement with Atomaer Holdings Pty Ltd ("Atomaer") to
evaluate the potential of the Tenements. Under this agreement Atomaer has the right to subscribe for a 60%
interest in Weld Range Metals for $500,000, now that the Company has signed the agreement to acquire the
remaining majority interest in the Tenements. Atomaer is a private company based in Perth Western Australia
and is responsible for raising funds for the acquisition and development of the Weld Range Metals Project and
providing and/or procuring process technologies, technical personnel and management services for the
purposes of conducting and managing the evaluation and development of the Weld Range Metals Project.
The agreement will ensure Dragon Mining will remain focussed on its Scandinavian gold assets but will derive
value from the metal inventory located in the Tenements.
The Tenements which are known to host chromium, iron, nickel, cobalt and PGE (Platinum Group Elements)
mineralisation are located in the Murchison District, close to the centre of the new iron ore province in the Mid
West Region of Western Australia. The proposed new rail link from the new iron ore mines to the proposed
Oakajee Deep Water Port will be routed close to the southern boundary of the Tenements.
Historical work on the Tenements has been reappraised by independent consultants Snowden Mining Industry
Consultants ("Snowden"). Snowden has reported an updated Inferred Resource estimate for the chromium
mineralisation of 63.5 million tonnes at 5.2% chromium, 38.1% iron and 0.38% nickel at a cut-off grade of 4%
chromium. These resources are near surface and amendable to bulk open cut mining.
The Weld Range Metals Project comprises the evaluation, development and operation of facilities for production
of intermediate and refined alloys containing chrome, iron and nickel as feedstock for the production of stainless
steel and special alloys.
Weld Range Metals is currently reviewing the optimal financing structure for the Company to undertake
feasibility studies and, if viable, construction of vertically integrated production facilities for intermediate and
refined stainless alloys. As an interim step an Information Memorandum is being finalised to support the
raising of approximately $5 million to repay the funds advanced by Dragon Mining and Atomaer to purchase the
remaining interests in the Tenements, as well as undertake further drilling and scoping studies.
