Perth-based mineral explorer Westgold Resources NL will raise $2.5 million through a placement to boost its Tennant Creek asset portfolio as the company considers a spin-out of its WA assets.
Perth-based mineral explorer Westgold Resources NL will raise $2.5 million through a placement to boost its Tennant Creek asset portfolio as the company considers a spin-out of its WA assets.
Westgold told the Stock Exchange in an announcement this morning that it believed its core focus should be on its assets in the Northern Territory, and was reviewing its options to spin-out these assets into a separately listed exploration company.
The company has requested a trading halt.
Meanwhile, the placement of 10 million shares at 25 cents each will see 6 million shares go to East Perth's Metals Exploration Ltd, boosting its stake in Westgold to 19.6 per cent.
The full text of a company announcement is pasted below
The Company is pleased to announce that it has completed a placement of 10 million shares at $0.25 to a number of sophisticated investors to raise $2.5 million of working capital.
The majority of funds will be applied to the further advancement of the Company's exploration asset portfolio within the Tennant Creek region and the rationalization of other exploration assets in line with the Company's new strategic direction.
Metals Exploration Ltd ("Metals Ex") will increase its direct share holding from 14.9% to 19.6% by acquiring a further 6 million shares. The increase in shareholding by Metals Ex indicates its ongoing support for the Company's exploration, in particular at the Rover Project.
Proposed Spin Out of WA Gold, Uranium and Nickel Assets
The Company also wishes to advise that it is currently evaluating the "spin out" of its WA gold, uranium and nickel assets into a new listed entity which would initially remain controlled by Westgold.
The Board of Westgold believes its core focus and effort should be on its Tennant Creek portfolio of assets where a significant Lead-Zinc-Silver discovery at Explorer 108 is under evaluation. In addition, within the Rover Field of its Tennant Creek project significant Iron Oxide-Copper- Gold mineralization occurs at Rover 1 and Explorer 142 which is also under evaluation.
In addition to its Rover project, Westgold owns a substantial portfolio of highly prospective exploration tenure in Western Australia. The Board of Westgold believes that this portfolio of assets is deserving of more dedicated exploration effort and funding.
Consequently, the Board is reviewing its options to spin-out these assets into a separately listed exploration company.
The primary assets of the proposed spin-out company would be;
Yandal Gold - The Company has a large land holding in the highly prospective Yandal Belt in WA. The Yandal Belt has been one of the more productive greenstone belts in WA in the past 20 years and in addition to the large tenure the Company acquired a significant data base from AngloGold Ashanti Australia Limited. Drilling during 2005-2006 produced significant results at the Mission Prospect in the Darlot region including 8m at 9.0g/t Au, 3m at 14.1g/t Au, 4m at 9.5g/t Au and 2m at 9.5g/t Au. A number of other significant anomalies requiring further drilling have been identified elsewhere in the project.
Yandal Uranium - Recent processing of radiometric data from the Yandal Project has highlighted two areas prospective for uranium mineralisation associated with lake systems and palaeochannels. These prospects occur near some of the more prospective areas of WA which include delineated deposits such as Lake Way, Yeelirrie and Lake Maitland. At Lake Darlot the Company has a number of tenements which have significant uranium channel radiometric anomalies that have had no previous exploration. In the northern part of the Yandal Belt the Company has tenure over a large, partly buried palaeochannel east of Lake Way. Radiometric data over the palaeochannel indicates areas of significant uranium anomalism.
Kimberley Gold - The Company has tenements prospective for epithermal gold northwest of Halls Creek. Numerous epithermal veins have been identified over an area of 10 by 15 kilometres and preliminary limited rock chip sampling completed to date has identified anomalous gold (up to 0.4g/t) and other indicator elements.
Kalgoorlie Gold and Nickel - The Company holds tenure over a number of tenements prospective for gold and nickel between Kalgoorlie and Kambalda.
Under the proposed spin off Westgold would initially retain a major stake in the new company and Westgold would offer its shareholders a priority offer to take up shares in the new company.
Further details of the proposed IPO structure and board and management team will be announced in due course.
Accordingly the Company requests the lifting of the trading halt on its securities.
