Uranium West Pty Ltd, a wholly owned subsidiary of Perth-based Crescent Gold Ltd, has committed $16 million to a uranium exploration program in South Australia.
Uranium West has just secured the right to earn up to a 50 per cent interest in the Sturt Joint Venture in SA from TC Development Corporation Pty Ltd.
Uranium West has also agreed to purchase the Golden Vale Gold Prospect, near Menzies, in Western Australia for $2million, subject to farming in to a 25 per cent minimum interest.
Under the JV Agreement with TC Development, Uranium West will have the right to earn into the Sturt Project by a staged spending programme of $4 million a year for four years, which will entitle Uranium West to earn 12.5 per cent of the project per year.
Subject to the receipt of remaining approvals, the JV group proposes to commence operations in the Sturt Joint Venture area in the first quarter of 2008.
At the same time, Crescent's board has resolved to de-merge the companies to create two focussed entities, with Crescent Gold focusing on its growth and exploration strategy and ramping up gold production at Laverton, and Uranium West focusing on the exploration of uranium, copper and gold in South Australia and the Northern Territory.
Crescent's Laverton Gold Project has entered the final stages of commissioning and is now on the way to a progressive ramp up to an average of 80,000 ounces of gold per annum.
Crescent said the de-merger would give its shareholders an entitlement, on a pro-rata basis, at no direct cost, in a separately listed company that would enhance shareholder value through more focussed management of each of the separately listed businesses and assets.
Crescent and Uranium West have commenced obtaining the necessary approvals to complete the proposed in specie distribution and capital return to all Crescent Gold shareholders, before Uranium West applies to list on the Australian Securities Exchange.
Crescent said it would advise shareholders of the record and ex-entitlement date for receiving the Uranium West shares as soon as practicable.