West Perth-based gold explorer Exco Resources Ltd has sold its Exco Operations (SA) subsidiary for $12 million to Syrah Resources Ltd and RMB Resources Ltd.
The principal asset of Exco Operations (SA) is the White Dam Gold Project located 80km west of Broken Hill, New South Wales.
The White Dam Gold Project is an advanced development project containing a mineral inventory of 330,400 ounces of gold, as recently reported by Exco Resources Ltd.
RMB Resources Ltd, a resources merchant banking subsidiary of Rand Merchant Bank in South Africa, will acquire the remaining 20 per cent.
The total acquisition consideration is $12 million in a combination of upfront payments, Syrah shares and deferred payments.
Syrah and RMB Resources have been granted an eight week exclusive option period during which they will complete a full due diligence program.
The White Dam Gold Project has most approvals required to start project development. The joint purchasers anticipate that construction will start in mid 2008 with gold able to be produced in the second half of that year.
Acquisition of the White Dam Gold Project is consistent with Syrah's strategy to acquire advanced resource projects with early production and cash flow.
Syrah Resources, a spin-off from Copper Strike Ltd, holds tenement positions in the Mt Isa Inlier (NW Qld), SE Queensland and North Flinders Ranges (South Australia) and is actively exploring for precious and base metals.
Exco Shares were down by more than 7 per cent to 36 cents at close of trade.
