PERTH (miningweekly.com) – Gold hopeful Tombola Gold has struck a A$7.3-million agreement to acquire the Lorena mine and processing facility, in Queensland.

The Lorena gold project is located 30 km from Tombola’s flagship Mt Freda gold mine, and includes an integrated carbon-in-leach processing facility with a capacity of between 250 000 t/y to 300 000 t/y, a permitted tailings storage facility, permitted mining and exploration leases and an existing opencut gold and copper mine.

Under the terms of the agreement, Tombola will pay an initial A$2-million on completion of the transaction, and a further A$5-million in deferred payments between 120 days and 270 days after completion, depending on when approval is obtained for the planned expansion of the tailings dam.

Tombola will also issue five-million shares in the company, at an implied value of 6c a share.

“Entering into a formal agreement for the Lorena assets is a pivotal step in Tombola’s future of becoming a meaningful Australian gold producer. Importantly, the acquisition not only allows Tombola to increase gold production as well as undertake gold optimisation planning studies, but now we will have the capacity to treat various ore bodies with gold and copper in the Cloncurry region,” said Tombola MD Byron Miles.

“The acquisition terms were negotiated to allow Tombola to use its existing cash reserves and cash flow to fund the cash consideration from near-term gold production, however, we have now added a substantial asset to the balance sheet which should allow Tombola to expand faster and minimise dilution for shareholders.”

In addition to the Lorena transaction, Tombola also executed a binding term sheet with True North Copper, gaining an interest in a further five project sites around Cloncurry, including mineral leases.

Tombola noted that the True North portfolio brought three development-ready and permitted mine projects, as well as a large tract of highly prospective exploration ground.

Tombola will pay True North Copper A$1.5-million in cash and will issue the company 75-million shares, which will be subject to a 12-month escrow restriction.

“Both of these acquisitions significantly add to the Tombola development story as we look to fast-track becoming a meaningful gold producer. In addition, the extensive pipeline of projects offers significant upside to increasing the resource base of the company,” said Miles.