Gindalbie buys Gossan

GINDALBIE Gold has bought the Gossan Hill gold deposit from Newmont, which is near its Minjar gold operations.

Gossan Hill has reserves of 2.1 million ounces of silver and 70,000 ounces of gold.

Gindalbie is paying $3.5 million for the mine plus a 13.5 per cent net smelter royalty payable from production.

Gindalbie managing director David McSweeney said the acquisition followed the completion of a successful feasibility study on development options for Gossan Hill in joint venture with Newmont.

"This study demonstrates that the deposit can be successfully mined and milled through the Minjar treatment plant [which is about eight kilometres away] with a mine life of about 18 months and estimated cash costs of $320 per gold equivalent ounce, making it an atractive development proposition," he said.

"By acquiring 100 per cent of the deposit, however, Gindalbie should be able to generate an improved return from the project."