Aspiring Kalgoorlie-based gold miner MacPhersons Reward has confirmed it will purchase the Nimbus Silver project and its processing plant from Reed Resources in a cash and scrip deal worth approximately $5 million.
MacPhersons first announced to the market it was planning to acquire Nimbus from Reed in May.
MacPhersons said it would pay $3 million cash, issue $1.5 million in shares, a one per cent royalty on zinc production from the two mining leases and reimburse Reed up to $500,000 for mill refurbishment costs.
The Nimbus project comprises two mining leases located around 55 kilometres from the company's MacPhersons Reward gold mine in Coolgardie, and a processing plant that was placed on care and maintenance in 2007.
Exploration results indicate a zinc-polymetallic exploration target with a range of between 200,000 to 400,000 tonnes.
The deal also includes a milling agreement option for Reed to process ore mined from its Sand Queen mine located north of Kalgoorlie.
The acquisition of Nimbus and the associated mill is key for MacPhersons, which requires a facility to process gold bearing ore from its namesake Coolgardie mine.
The company said today that scheduling was under way to recommission the mill by mid-2012.
Its stock was steady at 28 cents, at 11:45AM (WST).
