25/05/2015 - 15:58

Frontier buys former St Barbara mine

25/05/2015 - 15:58

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Shares in gold and copper explorer Frontier Resources doubled on news it will acquire an 80 per cent stake in the Gold Ridge mine in Guadalcanal, previously operated by St Barbara.

Frontier buys former St Barbara mine
Frontier has bought into the open pit gold mine in Guadalcanal.

Shares in gold and copper explorer Frontier Resources doubled on news it will acquire an 80 per cent stake in the Gold Ridge mine in Guadalcanal, previously operated by St Barbara.

Additionally, Frontier managing director Peter McNeil will step down, to be replaced in the role by Paige McNeil.

Mr McNeil will continue as chairman and will assist with chief geologist oversight, while Peter Swiriduik has also been appointed a director.

The stake is being purchased from GoldRidge Community Investment, a group of landowners which purchased the troubled mine from St Barbara for $100 earlier this month.

That purchase included a series of liabilities related to the mine and responsibility for any consequences of a potential tailings dam failure.

Mr Mcneil said Frontier had signed a heads of agreement for a joint venture with GoldRidge Community Investment.

 

"Frontier Resources Ltd will acquire an 80 per cent interest in the Gold Ridge mine/project that contains approximately 3.2 million ounces in total resources.

"As consideration, Frontier will issue a 19.9 per cent equity in Frontier, in its ordinary shares, to GCIL and deferred carry their 20 per cent interest into production, being repayable from 50 per cent of their future pro-rata profits.

"GCIL will then have a total project equity of 35.9 per cent.

"GCIL will also be issued a deferred 4.98 per centequity of Frontier, in its ordinary shares, one year after the Joint Venture Commencement Date."

Former Solomon Islands mining minister Walton Naezon, who had chaired the community group, is proposed to step onto the board as a director.

Frontier closed up 100 per cent to 0.6 cents per share.

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