08/12/2011 - 10:46

Ramelius acquires Barlee project

08/12/2011 - 10:46


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Ramelius acquires Barlee project

Ramelius Resources has announced that it has agreed to purchase from Beacon Minerals an 80 per cent interest in a mining lease containing the Barlee Gold Project. The payment will be $4 million in cash and a staged royalty payment.

Beacon has previously announced a resource for the project of 384,000 tonnes at 6 grams per tonne, equalling 74,000 ounces of gold. It has also recently lodged a proposal to mine an open pit, containing an estimated 172,000 tonnes of resource.

The remaining 20 per cent of the lease is held by private interests.

The project is located between Ramelius' Mt Magnet and Burbanks treatment plants. With the purchase subject to approvals under the ASX listing rules, Mining Act approvals and other standard conditions precedent, Ramelius expects to commence operations at Barlee in calendar 2012.

The Beacon announcement can be viewed below:

Beacon Minerals Ltd wishes to announce it has signed an agreement to sell Mining Lease ML 77/1254 (BCN ownership 80%) at the Barlee Gold Project to Ramelius Resources Ltd for the following consideration:

- Payment of $4 million cash representing reimbursement of exploration expenditure.

- Royalty of $80 per ounce for gold produced from 1 to 40,000 ounces from the ML.

- Royalty of $160 per ounce for gold produced from 40,001 to 100,000 ounces from the ML.

- Royalty of 2.0% of the value of gold produced from the ML above 100,000 ounces.

This ML forms the basis for the recently completed Mining Proposal submitted to the Department of Mines which was based on an initial optimised mining resource of 172,000 tonnes at 7.5 g/t gold for 42,000 ounces.

At the completion of the transaction, which is subject to shareholder approval, BCN will have;

- Cash reserves of approximately $5,000,000.

- Listed securities in Consolidated Tin Mines Ltd with an estimated value of $900,000.

- Royalty income from the production of gold from the mining lease.

- 388 square kilometres of exploration ground at the Barlee Gold Project.

Beacon Minerals managing director Darryl Harris said “This offer was assessed by the Board to be the most attractive in regards to the maximisation of shareholder wealth. Other options were evaluated including toll treatment at existing operations and joint ventures/toll treatment with potential operations that maybe coming on stream in the region. These options provided an unsatisfactory financial return and provided no certainty to monetising the value of the in ground JORC inferred resource.

"Given the significant appreciation in the gold price and therefore increases in profit margins for producers, the lost opportunity costs for existing producers to treat third party feed material and not their own, led to higher than anticipated toll treatment costs.

"Ramelius is an experienced producer, with substantial cash reserves, and have managed similar mining, trucking and processing operations at their Wattle Dam Project. In addition, they have an existing operational process plant at Mt Magnet with plans to commence mining at Barlee in 2012.

"After an extensive exploration effort, including over 90,000 metres of drilling, 10,000 geochemical samples and aeromagnetic surveys, insufficient resources have been established at Barlee to support a stand alone processing facility. Further exploration on identified targets to increase the resource base would require additional funds and therefore create further dilution for existing shareholders.

"This recapitalisation allows the company to continue exploration of several prospective targets at Barlee without dilution of current shareholders as well as provide funds to evaluate project opportunities in geological regions where existing large scale gold resources occur.”

Beacon will still retain ownership of 100% of the surrounding exploration properties - E 77/1364, E77/1392, E77/1711, E77/1712, E77/1713 and E77/1714 which constitute approximately 300 square kilometres and 80% of E77/1297 (approximately 100 square kilometres) on which the 12 square kilometre mining lease resides.

The sale of the mining lease is subject to shareholder approval and other standard conditions precedent. Appropriate notification will be given to shareholders for the General Meeting to approve the sale of the asset.


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