17/07/2014 - 10:59

Minera to buy Peruvian plant for $US5m

17/07/2014 - 10:59

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Shares in Perth gold miner Minera Gold rose by over 33 per cent after it announced it had signed an agreement to buy the San Santiago gold and copper processing plant in Peru for $US5.5million.

Minera to buy Peruvian plant for $US5m
Minera managing director Ashley Pattison.

Shares in Perth gold miner Minera Gold rose by over 33 per cent after it announced it had signed an agreement to buy the San Santiago gold and copper processing plant in Peru for $US5.5million.

The acquisition also includes the lease of about 9,000 hectares of mining rights surrounding the plant, in the iron-copper-gold district of Cobrepampa.

The plant is located near a larger milling complex that houses a CIP gold circuit, which Minera has leased from a private Peruvian entity.

“Acquiring the plant outright will not only save the company around $1 million a year on its current lease commitments for the gold circuit and reduce its all-in gold cash costs per ounce, but will also deliver a second processing and revenue stream from treating copper sourced from the surrounding 9,000 hectares of concessions being acquired,” Minera said in a statement. 

Minera said it had the backing of $3 million from metal streaming investment company SilverStream to help fund the acquisition, with the possibility of a further $1.5 million to put towards an expansion permit to operate the plant’s two copper circuits at a more efficient rate. 

In return for financial support, Minera said SilverSteam would receive all of the silver that is mined from the copper circuts at San Santiago in the next 15 years. 

“The upside benefits, risk mitigation and diversification from owning and optimising the high grade vein copper-gold-silver mining from the acquired mining rights to a very large tract of prospective and productive acreage surrounding the plant can’t be ignored,” Minera managing director Ashley Pattison said.

“Minera also plans to move to total control of future copper processing at the plant.”

Minera has targeted full ownership of the plant by late September. 

Shares in Minera last traded at 0.4 cents per share at 10:50am.

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