JOHANNESBURG (miningweekly.com) – Australian gold and base-metal producer Citadel Resources has entered into a A$25-million share subscription agreement, and a copper off-take deal with global non-ferrous trading house Transamine SA.

The agreement was based on the sale of 50 000 t/y copper concentrate from the Jabal Sayid mine, in Saudi Arabia, at market terms for five years, from 2011.

Citadel said in a statement that the share subscription agreement represented an important milestone for the company, underpinning its share price at a premium to current market prices, and providing it with the additional funding to enable the ongoing development of the Jabal Sayid copper/gold project, where first production is targeted for 2011.

Transamine would subscribe for A$25-million of equity in Citadel through the issue of 72,6-million ordinary share, representing about 5% of the current fully diluted share basis.

At full production, the Jabal Sayid project was expected to produce around 240 000 t/y of copper concentrate, containing 60 000 t/y of copper, with payable gold and silver The off-take arrangement with Transamine represented a sale of just over 20% of the project’s forecasted annual production, at attractive commercial terms, Citadel stated.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.