RNC Minerals (TSX: RNX) ("RNC") is pleased to announce that it has closed the acquisition ofthe Higginsville Gold Operation ("HGO") from Westgold Resources Limited ("Westgold").
Image: Map Showing HGO Tenements. Photo: courtesy of CNW Group/RNC Minerals.
RNC has paid Westgold A$25 million in cash and issued a total of 56.9 million shares in satisfaction of the HGO purchase price. The cash portion of the HGO purchase price was funded by a new senior secured C$35 million debt facility entered into by RNC. This facility will also fund working capital requirements of the combined business.
Mark Selby, President and CEO of RNC, commented “Today’s announcement is another major step forward for RNC. The combination of the Higginsville Mill and our Beta Hunt Mine will transform RNC’s gold operations in Western Australia into a multi-mine operation anchored by the 1.3 Mtpa HGO Mill, the high grade and bulk resource potential at Beta Hunt (which was once again confirmed last week), and a large land position in the Kalgoorlie gold region. RNC is now focused on the rapid integration of Beta Hunt and HGO, which creates tremendous value for RNC shareholders.”
Mr. Selby continued “We had significant interest from a number of financing sources and are very pleased to welcome a new financing partner to help us build RNC through our next phase of growth. This partner has an excellent track record of providing capital to help build small and mid-cap companies across a range of industries. The financing package provides significant flexibility at a competitive cost which allows us to complete this acquisition and minimize equity dilution.”
The acquisition of the Higginsville operations and its modern, low cost 1.3 Mtpa gold mill will provide a key piece of RNC’s strategy to unlock the significant potential of its Beta Hunt gold mine. The Higginsville mill will significantly reduce milling cost for Beta Hunt (RNC expects processing cost savings in excess of C$15 per tonne, a 35% reduction). HGO includes a 367,000 ounce historical reserve within a 1.2 million ounce historical measured & indicated gold resource, along with a further 0.7 million ounce historical inferred resource1, all located on a 386 square kilometer land position in the Kalgoorlie gold region. RNC successfully tolled Beta Hunt material through the HGO mill in 2018, achieving 94% gold recovery.
Source: Company Press Release