05/09/2016 - 15:21

Intermin, Primary in gold deals

05/09/2016 - 15:21

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Two Western Australian gold hopefuls, Intermin Resources and Primary Gold, have announced earn-in and drilling-for-equity deals, respectively, to progress potential gold projects.

Local gold producers are piquing stock market interest. Photo: Attila Csaszar

Two Western Australian gold hopefuls, Intermin Resources and Primary Gold, have announced earn-in and drilling-for-equity deals, respectively, to progress potential gold projects.

Intermin Resources has signed an agreement with Eastern Goldfields, offering that company the opportunity to earn into a joint venture by spending to develop two projects – Menzies and Goongarrie.

Both locations have had historic production measuring about 830,000 ounces in total, with Intermin acquiring Goongarrie from Cove Resources in January of this year.

For Eastern Goldfields, the potential slice of a joint venture steps up depending on spending.

A spend of $2 million within two years will earn a 25 per cent share, while an additional $2 million within four years would take it to a 50 per cent holdings.

A further spend of $1.5 million within four years would again lift its portion, to 65 per cent.

Eastern will additionally subscribe to $1.5 million of shares in Intermin, which has a market capitalisation of around $20 million.

Eastern Goldfields executive chairman Michael Fotios said access to the Menzies and Goongarrie Projects and resources was aligned with the company’s plan to complete a bankable feasibility study into the development of a standalone mill at Mt Ida.

“The Menzies project may also offer a viable alternate location for the positioning of a second production hub away from Davyhurst, potentially accessing gold resources from the north, east, and south of Menzies,” he said.

Meanwhile, Primary Gold has executed a binding agreement with contractor Ausdrill for around 30,000 metres of drilling at two potential projects, in return for an issue of $3 million Primary shares.

Drilling will occur at Mount Bundy, south-east of Darwin, and Coolgardie in WA, with Primary planning a mine optimisation study for the latter and production planned to begin in 2017.

Greenfields target drilling at the Mt Bundy site was also flagged.

Shares in Primary were up 4.4 per cent to trade at 12 cents each at the close, while Intermin shares were 16.7 per cent lower at 1.3 cents each.

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