09/01/2013 - 13:29

St Barbara sells WA gold mine

09/01/2013 - 13:29

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St Barbara sells WA gold mine

Gold miner St Barbara has sold its mothballed Southern Cross mining operation in WA to a Chinese company for $22.5 million in cash, as a Malaga-based company profits from the deal. 

The Melbourne-based miner today said it had entered into an agreement with Hanking Gold Mining, a subsidiary of China Hanking Holdings, subject to necessary third party and government approvals.

St Barbara placed the operation on care and maintenance during the December quarter.

Under the deal, Hanking is set to take ownership of the Marvel Loch underground mine and processing plant and 932 square kilometres of exploration and mining licences.

St Barbara said the sale includes all mine and related assets within the operation, with an approximate value of $10 million. The operation has a total resource of around 2.4 million ounces of gold.

Settlement of the transaction is expected in February or March.

In a separate but related deal, Malaga-based 3D Resources has struck a deal with Hanking that will see it reap 15 per cent of the net profit generated from gold production at Southern Cross, calculated annually.

As part of the deal, Hanking has committed to invest a minimum of $50 million on mine development at Southern Cross, with a view to resuming production over the next 12 months, 3D said.

3D Resources also has the first right of refusal if the operation is sold by the Chinese company.

Southern Cross was introduced by 3D to Hanking, a Hong Kong listed mining company that holds operations in China and Indonesia.

Shares in St Barbara shed 2.3c to $1.397 while shares in 3D climbed 0.8c to 4c at 1316 AWST today. 

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