Southern Gold seeks buyers for WA assets, as its focus shifts to South Korea
PERTH (miningweekly.com) – Junior Southern Gold has put up a for-sale sign on its Western Australian gold assets, including the Cannon gold mine.
The decision to find buyers for its Western Australian gold assets comes on the back of a company-wide strategic review, which concluded that there would be significant shareholder value by realising value from the asset base, while obviating the need for additional capital to develop the Cannon mine.
“Given the market capitalisation of Southern Gold and the amount of capital that can be deployed each year to advance the assets in Australia and South Korea, we were finding it hard to do justice to both at the same time,” said Southern Gold MD Simon Mitchell.
“With this strategic realignment we can release value from the Australian assets while concentrating on the South Korean assets, a jurisdiction where we see incredible growth over the coming years.”
While acknowledging the value in the Kalgoorlie-based gold portfolio, Mitchell said that the development costs for the Cannon underground project would be highly dilutive to shareholders, and to a certain extent, would distract the company from its task of finding a globally significant precious metals deposit in South Korea.
The Cannon underground project is estimated to host a resource of some 142 270 t, grading 5.17 g/t gold for 23 580 oz of contained gold.
In addition to Cannon, Southern Gold also owns a 75% interest in the Glandore gold project, as well as the Cowarna gold project.
Southern Gold is hoping to conclude the sales process in June or July this year.
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