JOHANNESBURG (miningweekly.com) – ASX-listed gold and base metals explorer Drummond Gold has reached an agreement with fellow ASX-listed company Alliance Resources to acquire the Maldon gold project, in Victoria.

The transaction was aimed at achieving early gold production and cash flow for Drummond, while lifting the company to the ranks of an Australian gold producer. It would further strengthen the capacity to develop Drummond’s projects in the Drummond Basin, in Queensland.

The acquisition would also provide the expanded company with a major shareholding in Alliance Resources.

Under the agreement, Drummond has proposed to issue Alliance with fully paid ordinary shares in Drummond in exchange for acquiring Maldon Resources, a wholly owned subsidiary of Alliance, and the owner of the Maldon gold project.

The Maldon gold project has historically produced a total of 1,75-million ounces of gold at an average grade of 28 g/t. Alliance has already undertaken major development work at Maldon, aimed at bringing the Alliance South gold lode into production.

However, development was suspended late last year to conserve cash and meet Alliance’s commitments to the Four Mile uranium project.

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