21/02/2008 - 10:36

Silver Swan acquires Mercator Gold tenements

21/02/2008 - 10:36

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Silver Swan Group Ltd has announced the all-scrip acquisition of a portfolio of prospective gold, copper and base metal tenements in Western Australia's Murchison region from Mercator Gold plc.


Silver Swan Group Ltd has announced the all-scrip acquisition of a portfolio of prospective gold, copper and base metal tenements in Western Australia's Murchison region from Mercator Gold plc.

West Perth-based Silver Swan will acquire 100 per cent ownership of a portfolio of tenements in five project areas covering approximately 600 square kilometres, and all within 60 kilometres of Mercator's Yaloginda gold operation, near Meekatharra.

The company will issue Mercator with 10 million ordinary shares (worth $2.2 million at last closing price) and 4 million performance shares in consideration for a 100 per cent interest in the tenement portfolio.

Exploration programs will commence immediately on approval of the transaction by Silver Swan's shareholders.

Following the completion of the transaction, Mercator will hold 30 per cent of the ordinary shares in Silver Swan.

Mercator has also agreed to provide Silver Swan with the option to treat any commercially viable mineralisation identified by Silver Swan at its mill on commercial terms should the ore be suitable.

The purchase provides Silver Swan with a focussed greenfields to brownfields exploration portfolio in an area hosting significant Archaean gold camps, namely Yaloginda, Paddys Flat, Reedy and the Noa lines.

Mercator commenced gold production from its Yaloginda operation in October 2007 having identified open pit and underground ore reserves totalling 504,000 oz.

Forecast production is 120,000 oz of gold per year.

Historic production from Paddy's Flat, immediately east of the township of Meekatharra, totals approximately 3 million ounces of gold. Recent production at Yaloginda, southwest of Meekatharra, totals 1.5 million ounces, mined by various companies principally between 1982 and early 2005.

High gold prices are widely forecast to continue and base metal prices are currently stabilising at historically high levels. Gold is currently at a record above US$900 per ounce and copper at US$3.40 per pound.

Silver Swan has also announced the appointment of Dr Susan Vearncombe as managing director.

Dr Vearncombe was one of the founding members of Mercator and former general manager - geology.

Michael Elias, a non-executive director of mercator will also join the board of Silver Swan as non-executive chairman.

 

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