PERTH (miningweekly.com) – ASX-listed junior A1 Consolidated Gold has inked an agreement with fellow-listed Octagonal Resources to acquire the Maldon gold project, in Victoria.
In exchange for the project, Octagonal would receive A$5.1-million in A1 Gold shares, with the shares priced at 3c each, as well as 1:3 listed A1 Gold options that would vest three months after the completion of the transaction and would have a five-year life, as well as a board position on the A1 Gold board.
A1 Gold told shareholders on Monday that the acquisition of the Maldon gold project provided the company with certainty of ore processing for its A1 gold mine, and removed the need to construct a mill on-site, providing substantial savings in ore processing costs.
The Maldon gold operation includes a 150 000 t/y carbon-in-leach processing plant, and A1 Gold said that it intended to install a gravity circuit into the plant to improve gold recovery and eventually increase throughput.
The combined company would hold more than 330 000 oz of underground and openpit resources, with the option to expand to nearly 600 000 oz of resource if an option over the Walhalla tenement, also in Victoria, is exercised.
The A1 gold mine is currently estimated to host an indicated resource of about 41 200 oz and an inferred resource of 240 000 oz, while the option over Walhalla would add an additional 268 000 oz of inferred resource.
For its part, Octagonal told shareholders that the transaction would allow the company to become a significant shareholder in A1 Gold and to benefit from the synergies in merging the two operations, as well as to gain exposure to an increased resource base.
Octagonal’s shareholders would also retain exposure to the Maldon gold projects though their shareholding in A1 Gold.