21/06/2013 - 15:40

Fraser Range backs out of Plumridge buy

21/06/2013 - 15:40

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The lack-lustre equity market has resulted in International Goldfields failing to sell off its only Australian asset and settling for a farm-in agreement.

The company had entered into negotiations with Fraser Range Metals Group, which intended to buy the Plumridge gold project in Western Australia’s Yilgarn region.

But in order to buy both the project, and International Goldfields new farm-in partner Fraser Range Resources, Fraser Range Metals needed to raise about $4 million.

The company has announced today its attempts to raise the cash have failed, and negotiations have been canned.

Managing director Simon King said the current market conditions, and numerous informal discussions were unsuccessful, as well as attempts to renegotiate terms of the deal with International Goldfields.

“The terms under the Share Sale Agreements were agreed in different market conditions from those in which the Company finds itself in today,” Mr King said in a statement to the ASX.

“As the acquisition of Fraser Range Resources was conditional on the Plumridge Gold transaction proceeding, the Share Sale Agreement with Fraser Ranger Resources is no longer valid.”

Mr King said the company had already applied for an additional tenement adjoining the Plumridge project, which it still intended to explore once the license was granted.

International Goldfields has consequently executed a farm-in agreement with Fraser Range Resources to develop the Plumridge project.

Fraser Range Resources has agreed to invest $1 million over 18 months to earn a 60 per cent interest.

International Goldfields managing director Travis Schwertfeger said the board had always been cognisant that Fraser Range Metals Group may not have been able to raise the necessary funds.

“So in recent weeks we have been negotiating with other parties,” he said.

“Today’s farm in agreement represents the culmination of these negotiations and in our view provides [International Goldfields] and its shareholders with continuing exposure to the Plumridge Gold Project with a very real opportunity to monetise this remaining working interest moving forward.”

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