Silver Lake cancels Phillips River asset acquisition

Phillips River Mining shares have plunged on the Australian Securities Exchange after Silver Lake Resources terminated an asset sale agreement covering Phillips River’s gold assets in the Great Southern.

Phillips River said it would not be able to meet a delivery schedule under an off-take agreement covering its Trilogy gold joint venture with LN Metals International, which was due to commence in the second half of 2013.

As such, Silver Lake terminated the agreement, advising that a due diligence condition had not been completed to its satisfaction.

 “After numerous extensions of time, Silver Lake did not have sufficient confidence that the issue could be satisfactorily resolved,” Silver Lake said in a statement.

“Accordingly, the implementation agreement has been terminated.”

At 10:57AM, Phillips River stocks were down almost 40 per cent, trading at 16 cents.

Silver Lake and Phillips River first announced the agreement in January, when Silver Lake offered 0.882 of its shares for each Phillips River share.

The assets cover 2,500 square kilometres in the Great Southern, containing a JORC-compliant resource of 1 million ounces of gold and 10 million ounces of silver at the Kundip Mining Centre deposit.

Silver Lake was aiming to establish a third production base in the Great Southern, alongside its producing Mount Monger gold mine, and the Murchison gold project, which it expects to begin production by the first quarter of next year.