Ramelius Resources has signed a binding exclusivity and implementation deed for the proposed purchase of the Marda Gold Project (Marda) north of Southern Cross, Western Australia.
Image: The consideration payable for Marda will be funded from the Company’s current cash reserves. Photo courtesy of yodiyim/FreeDigitalPhotos.net.
This acquisition, which will cost A$13m ($9.3m), is to be facilitated by RMS completing a Deed of Company Arrangement (DOCA) in respect of Black Oak Minerals Ltd (in Liquidation) (“BOK”), the owner of Marda, which would result in RMS owning 100% of the shares in BOK.
The consideration includes an A$0.5 million non-refundable deposit to be paid to the Liquidators of BOK to help fund third party transaction costs and contribute towards the monies in the BOK creditors trust.
About the Marda Gold Project Marda is located 191km north-northeast of Ramelius’ Edna May operations and represents a shear controlled gold system containing a total of 333koz of Mineral Resources at 1.96 g/t Au and 151koz of Ore Reserves at 2.30 g/t Au.
Previously completed feasibility studies undertaken by BOK in 2012 and 2013 demonstrated that on a ‘stand-alone’ milling basis the oxide deposits were forecast to achieve overall metallurgical recovery of 95%. Gravity recovery accounted for approximately 60% of the overall gold recovery in the confirmatory test work.
About the Acquisition
The acquisition of Marda is consistent with Ramelius’ previously stated intention to assess and acquire value accretive mining opportunities within economic haulage distances to existing operational hubs. In the past, this has included the purchase of both the Vivien and Kathleen Valley deposits, from Gold Fields and Glencore respectively. Ore from these projects have been successfully processed through the company’s Mt Magnet facility with both generating significant returns on investment.
Ramelius intends to work quickly through the legal processes and assess regional exploration targets in order to facilitate Marda becoming a strategic satellite ore source for Edna May. It is expected that the acquisition of Marda will enhance future optionality around Edna May mine planning moving forward.
The acquisition of BOK is to be completed via a DOCA that will be put to the creditors of BOK in late October 2018. Under the binding Exclusivity and Implementation Deed the secured creditor of BOK is obliged to vote in favour of the Ramelius DOCA. Once the DOCA is approved by creditors an application will be filed with the Courts for approval to transfer the shares in BOK to Ramelius for nil consideration. Subject to the approval of BOK’s creditors and the Court, completion of the DOCA is expected before the end of the 2018 calendar year.
The A$13.0 million consideration payable for Marda will be funded from the Company’s current cash reserves.
Ramelius Managing Director, Mark Zeptner today said: “Ramelius’ acquisition of the Marda Gold Project highlights the strength of our team in identifying and ranking opportunities for incremental ore feed around our key mining hubs of Mt Magnet and Edna May. This has the potential for significantly enhancing future economics at the Edna May mine yet does not detract from our ability to execute strategic transactions in other jurisdictions.”
Source: Company Press Release