https://www.miningweekly.com

Southern Gold, Westgold in deal to develop Cannon underground mine

23rd January 2018

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

Font size: - +

JOHANNESBURG (miningweekly.com) – Australian gold producer Southern Gold has entered an agreement with development partner Westgold Resources for the underground development phase at the Cannon gold mine, near Kalgoorlie, Western Australia.

Westgold will pay Southern Gold A$1.5-million upfront for a five-year right-to-mine within a defined area at the Cannon gold project, as well as a production payment on a dollar per troy ounce of gold produced.

For each ounce of gold produced from the defined area, Southern Gold will receive a cash payment equal to A$160/oz for the first 15 000 oz of gold and A$180/oz for each ounce of gold above 15 000 oz.

The rate increases to A$190/oz for under 15 000 oz and A$210/oz over 15 000 oz if the gold price averages in excess of A$1 800/oz in the previous reporting quarter.

“Southern Gold has turned a cash consuming asset into a cash generating one. And it has done so in alignment with Southern Gold’s development philosophy of bringing in third parties who know how to mine and manage risk, particularly the elevated risks of underground mining,” Southern Gold MD Simon Mitchell explained on Tuesday.

“This deal with Westgold should generate cash for Southern Gold based on the high-grade gold resource at Cannon, which stands at 24 000 oz at 5.2 g/t gold in the indicated and inferred categories. The arrangement also ensures Southern Gold remains significantly exposed to the upside should the deposit continue at depth,” he added.

The agreement shifts all financing and underground operating risk operating risk to Westgold.

Edited by Creamer Media Reporter

Comments

Latest News

The integration of Alamos' Island Gold mine (pictured) and Argonaut's Magino mine will create synergies of $515-million.
Alamos buys rival Argonaut
27th March 2024 By: Mariaan Webb

Showroom

Magni SA
Magni SA

Magni SA is committed to developing the safest Telehandlers available to our customers for underground and surface mining, construction, forestry,...

VISIT SHOWROOM 
Condra Cranes
Condra Cranes

ISO-certified Condra manufactures overhead cranes, portal cranes, cantilever cranes and crane components: hoists, drives, end-carriages, brakes and...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.475 0.513s - 107pq - 2rq
Subscribe Now