Westonia to fundraise, cut costs in $65m redevelopment

Gold explorer Westonia Mines Ltd will pursue operating and capital cost-cutting initiatives as it commences a $65 million redevelopment of its Westonia project, following positive results from a feasibility study approved by directors yesterday.

At the meeting, the board of directors approved the feasibility study and authorised management to proceed towards financing the development of the project, with a view to completing the process by the fourth quarter of 2006.

The project, an open pit mine located one kilometre north of Westonia and 53 km north east of Merredin, will benefit from the company's transportation of its fully owned processing plant from its Big Bell project, in the Murchison goldfields, to Westonia. The company aims to commission the mine in the third quarter of 2007.

The company has obtained three quotations for the disassembly, relocation, reerection and commissioning of its 2.2 million tonnes per annum plant, with the estimated cost for plant relocation being $41 million, and a further $24 million of capital required for the initial mining pre-strip, tailings storage, first fill and infrastructure costs.

The company had previously raised $4 million through the placement of 23.5 million shares at 17c each, with 10.4 million going to Melbourne-based Lion Selection Group. The money was to fund the feasibility study as well as a continuation of the Company's exploration program.