28/05/2018 - 14:09

Resolute, Westgold invest $26m in junior explorers

28/05/2018 - 14:09

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Two local gold miners have announced equity investments in junior explorers today, with Resolute Mining investing $22.5 million in Canadian company Orca Gold while Westgold Resources has taken a 15 per cent stake in Musgrave Minerals.

Resolute, Westgold invest $26m in junior explorers
Peter Cook praised the new agreement.

Two local gold miners have announced equity investments in junior explorers today, with Resolute Mining investing $22.5 million in Canadian company Orca Gold while Westgold Resources has taken a 15 per cent stake in Musgrave Minerals.

Perth-based Resolute has subscribed for 32.4 million Orca shares at C67.5 cents each, with the placement to be completed in two equal tranches.

The first tranche will comprise a $C10.9 million ($11.3 million) cash consideration, while the second will be paid via the issue of 8.9 million Resolute shares to Orca.

Resolute has the right to appoint a director to the board of Orca on completion of the deal.

Orca's primary asset is a 70 per cent ownership interest in the block 14 gold project located in northern Sudan.

The project has a mineral resource of approximately 3.8 million ounces of gold and a feasibility study is currently being completed, with an expected output of 200,000oz per annum.

Resolute managing director John Welborn said the investment was opportunistic.

“Orca is a first mover in a region which is host to the largest gold rush seen in Africa in centuries,” he said.

“Sudan’s increasing political stability and highly prospective under explored geology has seen the country rapidly emerge as the second largest producer of gold in Africa.

“We believe the combination of our mutual exploration and development expertise and resources will materially advance the existing asset position and advance regional exploration and development opportunities.

“Ultimately our ambition is to participate in the development of a major new gold mining district consistent with Resolute’s Golden Pride legacy as a successful pioneer of the gold mining industry in East Africa.”

Resolute operates the Syama gold mine in Mali.

Shares in Resolute were off 0.85 per cent at $1.17 at 330pm AEDT.

Meanwhile Westgold has made a $3.4 million investment in West Perth-based Musgrave.

The investment gives Westgold a 15 per cent stake in Musgrave, which will use the funds to accelerate exploration work at its Cue project in the Murchison region.

The project consists of the Moyagee gold and Hollandaire copper resources.

Westgold has gold operations near Cue and the companies have agreed to cooperate on the exploration and development of their assets in the Murchison region.

Westgold managing director Peter Cook praised the new agreement.

“This is a nice deal with one of our closest Murchison region neighbours,” he said

“Musgrave’s Cue project portfolio shows great promise and there are clear synergies with Westgold’s operations in the area.”

Musgrave managing director Rob Waugh said the deal was a positive result for the company.

“The company is pleased to welcome Westgold to the Musgrave register,” he said.

“Westgold has three operating mills in the region of our Cue project, and is a highly regarded professional gold miner and processor.

“The strong cash position will enable Musgrave to accelerate exploration while also progressing development studies on the existing Break of Day and Lena resources within its 100 per cent owned Cue project.”

Shares in Westgold were off 0.3 per cent at $1.65 each while Musgrave shares were up 16.1 per cent at 6.5 cents each at the close.

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