Southern Gold buys key stake in neighbour
PERTH (miningweekly.com) – Explorer Southern Gold has agreed to buy a 9.6% stake in its neighbour Northern Mining in a share exchange.
Under the share sale agreement, Southern Gold would acquire more than 33.5-million shares in Northern Mining in exchange for more than 12.2-million of its own shares, representing a 3.5% stake in the company.
The Southern Gold shares would be issued under the company’s 15% placement capacity and would not require shareholder approval.
Southern Gold told shareholders on Friday that its investment in Northern Mining would provide the company with the option to apply its corporate and technical expertise to assist Northern Mining in realising its potential.
The junior added that it had no intention of becoming a majority shareholder in Northern Mining, but added that it could seek representation on that company’s board to manage its investment.
Northern Mining holds a suite of exploration tenements in Kalgoorlie, several of which were contiguous with Southern Gold’s Bulong gold project.
Southern Gold pointed out that there were exploration and operational synergies that could be achieved between the two companies.
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