Silver Lake Resources has is planning a third gold production base in Western Australia, after annoucing an agreement to acquire the Phillips River Mining's Great Southern gold tenements by way of scheme of arrangement.
The junior gold miner announced today that it would merge Phillips River’s gold assets into Silver Lake, offering 0.882 Silver Lake shares for each Phillips River share.
Silver Lake said the gold exploration assets, covering 2,500 square kilometres in the Great Southern, would collectively be known as the Great Southern Gold project following completion of the scheme of arrangement.
The company said the tenements had a current JORC-compliant resource of 1 million ounces of gold and 10 million ounces of Silver at the Kundip Mining Centre deposit.
The transaction remains conditional upon Silver Lake receiving court approval, regulatory approvals and shareholder support.
Silver Lake, which is developing its second gold mining operation in the Murchison, would have JORC-compliant gold resources of more than 4.3 million ounces post-merger.
Its Mount Monger gold mine is currently in production, with 200,000 ounce per annum production targeted from 2014.
Silver Lake expects first production from Murchison in the first quarter next year, ramping up to 100,000oz/year by 2014.
At 11:45AM WST, Silver Lake shares were steady at $3.55, while Phillips River shares were up 40 per cent, at 28 cents.
