PERTH (miningweekly.com) - Gold miner St Barbara has sold off its Southern Cross operations to a subsidiary of China Hanking Holdings in a deal worth some A$30-million.

The Southern Cross operations ceased mining and processing during the December quarter and were placed on care and maintenance. The project comprises a package of tenements covering around 120 km of the Southern Cross greenstone belt, in Western Australia.

The project currently holds a Joint Ore Reserves Committee-compliant resource of 2.4-million ounces of gold.

St Barbara said on Wednesday that the sale included all mine and related assets located at Southern Cross, including the Marvel Loch processing plant, with an approximate combined book value of around A$10-million.

The sale consideration consisted of A$22.5-million in cash, including a A$5-million cash deposit, as well as the assumption of rehabilitation obligations applying to the tenements being sold.

Subject to the acquisition obtaining Foreign Investment Review Board approval, as well as other necessary consent, St Barbara expected to complete the sale by either late February or early March.

Meanwhile, junior 3D Resources had negotiated to acquire a free-carry participation in the Southern Cross operations.

Under its agreement with Hanking, the ASX-listed 3D was entitled to a 15% net profit interest from all profits generated from gold production at the Southern Cross operation, and from any toll treatment from outside tenements that use the Marvel Loch gold processing plant.

As part of ensuring the project returns to production, Hanking would invest some $50-million in development funds to re-establish production over the next 12 months.

The development programme was aimed at building production from historic levels of 100 000 oz/y to between 180 000 oz/y and 200 000 oz/y by fully using the 2.4-million ton a year Marvel Loch processing facility.