Galane expands with US near-term production asset
TSX-V-listed Galane Gold has moved to reduce its country risk by adding a new project in the US to its portfolio, which currently comprises mining operations in Botswana and South Africa.
The gold miner on Wednesday announced that it would buy the Summit mine and 240 t/d Banner mill in New Mexico from a subsidiary of Waterton Precious Metals Fund II Cayman.
Galane will pay $17-million for the past producing, but fully permitted mine, which is located in the Steeple rock mining district.
The company has entered into an engagement letter with Canaccord Genuity in respect of a C$9-million private placement of subscription receipts of the company to fund the initial cash consideration, with a lead order from Palisades Goldcorp.
“Our goal at Galane is to acquire near-term production assets, which we consider to be highly accretive for our shareholders, and to leverage the strengths of our existing management team to put such assets back into production. This new venture is a perfect example of this approach. It represents an opportunity to increase Galane’s production, lower its operating costs and reduce its country risk. Galane’s plan is to update the economic plan for the mine and target production as quickly as possible,” said CEO Nick Brodie.
A 2014 technical report showed a six-year mine life, producing more than one-million ounces of silver and 16 000 oz/y of gold, at an all-in sustaining cost of $578 a gold-equivalent ounce.
About $4.2-million will be required to restart operations.
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