Newmont Mining has agreed to be a cornerstone investor in Middle Island Resources, which is planning a $12.5 million initial public offering and hopes to list on the Australian Securities Exchange later this year.
Newmont Mining has agreed to be a cornerstone investor in Middle Island Resources, which is planning a $12.5 million initial public offering and hopes to list on the Australian Securities Exchange later this year.
Middle Island Resources wants to develop a gold business in West Africa.
West Perth-based Middle Island plans to issue 50 million ordinary shares at 25 cents to raise $12.5 million.
On listing, it will have 100.1 million shares on issue, with Newmont controlling 11 per cent or 11.1 million shares, of the new explorer.
Middle Island Resources managing director, Rick Yeates said the company planned to build a resource base above 1.1 million ounces of gold within two years, including minimum reserves of 700,000 ounces, from at least one of its African projects.
See company statement below:
A Perth explorer with global mining powerhouse, Newmont, as a cornerstone investor, is to launch a A$12.5 million Initial Public Offering (IPO) and ASX listing campaign later this year to develop a gold business in West Africa.
Addressing the Paydirt 2010 Africa Downunder Conference in Perth, Middle Island Resources Limited Managing Director, Mr Rick Yeates, said the Company planned to build a resource base above 1.1 million ounces of gold within two years, including minimum reserves of 700,000 ounces, from at least one of its African projects.
Middle Island owns 100% of the Reo gold project in Burkina Faso, is earning 70% in the Nassile gold project in Niger, and a 90% stake in a second Niger project, Boulkagou/Dogona, and has a pipeline of numerous other opportunities in the region.
"Middle Island is a company with a Board and management team with more than 20 years experience in West Africa," Mr Yeates said.
"This provides a unique opportunity to leverage the IPO and forward exploration program off our knowledge of the target areas and employ our contacts to access new project opportunities," he said.
"There has been strong interest and support for the float from seed capitalists, broking houses, resource funds and merchant banks."
West Perth-based Middle Island plans to issue 50 million ordinary shares at 25 cents to raise A$12.5 million and on listing, will have 100.1 million shares on issue, with Newmont controlling 11% or 11.1 million shares, of the new explorer.
"The West African jurisdictions we have focused on have acceptable risk profiles, have sound if not the best legislative mining regimes in the world and are well exposed to the US$ gold price and costs," Mr Yeates said.
"We have focused on gold because of the current sustained and strong gold price and we expect that price strength to continue," he said.
"Importantly, gold offers the opportunity to process ore on site and fly it out for "over the counter sales" obviating the need for any expensive infrastructure."
Newmont has made numerous greenfields discoveries at Reo in the past three years including significant shallow intercepts of 34 metres at 16.4 g/t Au and is divesting the asset to Middle Island in return for its equity stake.
"We expect to be able to release our first Reo drill results shortly after listing," Mr Yeates said.
Middle Island is also spending US$2 million over three years to earn a 70% interest from Island Arc Exploration and Cassidy Gold Corp in the Nassile gold project in Niger, with at least eight gold targets already identified.
The Company also plans to spend US$1.0 million over a two year term for a 90% stake in the Cassidy Corp-owned Boulkagou/Dogona gold applications in Niger.
Mr Yeates said the area hosts substantial untested artisanal mining sites and offers considerable opportunity for greenfields discoveries, having never been subjected to modern exploration.
