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Middle Island’s Niger gold buy lapses, to launch ‘fresh overtures’

1st October 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – The share price of gold junior Middle Island Resources fell nearly 14% on Tuesday after the company’s acquisition agreement over the Samira Hill project, in Niger, lapsed.

In July, Middle Island entered into a sales agreement with TSX-listed Semafo to acquire the Samira Hill project for $1.25-million in cash and a fixed net smelter return royalty of 1.2% on any gold sold from the plant, in exchange for a full interest in African GeoMin Mining Development Corporation, which held an 80% interest in Société des Mines du Liptako (SML), the owner and operator of the Samira Hill gold mine.

The agreement was subject to a number of conditions, including various consents and approvals from the Nigerian government, which owns the remaining 20% interest in SML.

Middle Island told shareholders on Tuesday that these conditions had not been satisfied by the September 30 deadline, causing the agreement to lapse.

However, the company believed that the exploration permits contained within the agreement were central to the viability and longevity of the Samira Hill mine, and noted that it would continue to engage with the government of Niger with a view to securing government support for the purchase.

As such, Middle Island would launch “fresh overtures” to Semafo.

In the meantime, Middle Island’s cash deposit would be returned, and the miner noted that the A$5-million of equity capital recently raised as a condition of the agreement, would remain in trust until the end of October, at which time it would be returned to subscribers if government consent and approvals were not forthcoming.

The Samira Hill operations were placed on care and maintenance this month, as Semafo awaited the results of the Middle Island transaction.

Middle Island shares were trading at A$0.095 on Tuesday, back at the same level it traded on Friday. On Monday, the stock surged 22% to A$0.11 apiece.

Edited by Mariaan Webb
Creamer Media Contract Publishing Editor

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