Citigold has signed a memorandum of understanding (MOU) with a consortium to acquire the assets of Bharat Gold Mines (BGML) from the Indian Government.
The assets considered for acquisition include mining leases, land and plant in the heart of the Kolar Goldfield in Bangalore in Karnataka state.
Australian miner Citigol, which has been conducting field visits to the Kolar sites since 2006, has agreed to partner with Pan India Network Infravest, a part of Indian conglomerate Essel Group.
The Australian-Indian consortium is now planning to acquire the assets of BGM, a public sector undertaking of the Indian Government.
Citigold said that the acquisition is a part of its long term strategy to own another giant world class gold project to complement its existing Charters Towers gold project.
Over the last 150 years, the Kolar field produced 25 million ounces of gold, which was dug to depths of 3,200m.
The mine, however, was abandoned in 2001 due to combination of rock stress problems, old world inefficient work practices and a low spot price of gold.
Citigold expects potential for early gold production from re-treating some 32 million tones of tailings, open pit mining and production from shallow underground workings down to 600 meters.