PERTH (miningweekly.com) – ASX-listed junior Kidman Resources on Friday entered into a non-binding heads of agreement (HoA) to acquire the Mt Holland gold field, in Western Australia, for A$3.5-million.
Under the terms of the agreement, Kidman would acquire the project for A$500 000 in cash and A$1.5-million worth of Kindman shares, as well as repaying a A$1.5-million debt on behalf of project owner MH Gold.
The Mt Holland gold field has a combined measured, indicated and inferred mineral resource of 928 000 oz, and hosts the flagship Blue Vein deposit, which has a resource of 372 000 oz, at 2.30 g/t gold.
A 2013 prefeasibility study into the Blue Vein deposit found that the project could produce some 43 000 oz/y over an initial three year period.
Kidman MD Martin Donohue said on Friday that the acquisition of the Mt Holland gold field was consistent with the company’s strategy to become a substantial Australian gold producer by self-funding acquisitions with immediate or near-tern cash flow and strong potential for resource growth.
“Mt Holland meets our acquisition criteria perfectly,” Donohue said.
“Our immediate focus will be on growing the Blue Vein resource to ensure that our feasibility study and development decision are based on an inventory which is sufficient to generate robust financial returns.
“At the same time, we are ramping up production and cashflow at our Burbanks operations, which produced its first gold for Kidman only three months ago. This means we are well on track to achieve our objective of being a significant Australian gold producer with a substantial resource based and exploration upside.”
Kidman would start a drilling campaign at Blue Vein early in 2016.