12/06/2009 - 12:16

Straits takes 6% interest in Adamus

12/06/2009 - 12:16

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Straits Resources has taken a substantial shareholding in Adamus Resources as the latter steps up debt and equity talks for its $95 million gold project in Ghana.

Straits Resources has taken a substantial shareholding in Adamus Resources as the latter steps up debt and equity talks for its $95 million gold project in Ghana.

Straits has taken a 6 per cent shareholding after private subscribing for 10 million shares for 35 cents apiece, injecting $3.5 million into Adamus.

The company has around $US355 million after it sold its stake in its coal to Thailand's PTT International Company.

Adamus managing director Mark Bojanjic told WA Business News that there has been no talk with Straits of the latter increasing its shareholding in the company.

"Ultimately they have lots of cash and like mining projects, but at this stage that's not what the talks have been about; its been a pure investment from the outset," he said.

"They can see quality and its (Adamus share price) cheap."

He added that Straits was looking to make a few strategic investments in various companies.

Shares in Adamus last traded at 40.5 cents before it entered a trading halt.

Earlier this week, Adamus' board gave the go ahead for development of the Southern Ashanti gold project, which will generate $US100 million for the company in the first two years.

Mr Bojanjic added that given the attractive economics of the project, bringing a joint venture partner for the development of the project was not a necessity.

He said funding for the project will be a mix of debt and equity.

"At the moment we're quite advanced in discussions on both, not sure what the blend of debt and equity will be," Mr Bojanjic said.

"But it will support quite a lot of debt because the cash flow from the project is so good."

Capital costs are estimated to be between $80 million and $95 million for a 10-year operation that will produce 100,000 ounces of gold each year.

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