Metaliko Resources Limited to acquire the Bronzewing Gold Project in Western Australia

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Gold mine, WA Image credit: flickr User: Geoffsnaps

The Board of Metaliko Resources Ltd has reached an agreement with the Administrator of Navigator Resources Ltd to acquire all of the securities of Navigator Bronzewing Pty Ltd which is the wholly owned subsidiary of NAV. 

Gold mine, WA Image credit: flickr User: Geoffsnaps
Gold mine, WA
Image credit: flickr User: Geoffsnaps

According to the ASX announcement issued by the company, the acquisition includes the 2MTPA milling/CIP facility and associated infrastructure, Project Tenements and contained gold resources.

The Bronzewing Gold Project operated up until April 2013 when it was placed in Administration.

The mine had high costs of production and has changed numerous owners in a short amount of time, but Michael Ruane from Metaliko Resources believes he can cut those costs and revive the project.

“We don’t want to repeat the history of the two previous operators and nothing is without risk. The flip side is if the gold price went up, went back up to $1,500 which is not greatly above what it is, this could turn out quite lucrative for the Metaliko shareholders,” said Mr Ruane.

Adertisement

Metaliko will pay $4.82 million in cash to acquire 100% interest in the Bronzewing Gold Project. The Company will also arrange the release to the Administrator of $7.08 million of bank deposits previously lodged by the parent company (NAV) to cover DMP environmental bonds.

According to the article on ABC, the mine will eventually employ 150 staff which will most definitely boost Leinster’s community that suffered a big blow following the closure of the major nickel mine.

“The risk you take here is you’ve paid $5 million for an asset that we say would cost $80-$100 million to replace. The risk is that the gold price will continue to retreat in Australian dollars terms and that you are not able to establish gold grades, or resources with grades above 2 grams of more,” said Mr Ruane.

“But we don’t intend to go into production unless we’ve got resources that will fit the bill.”

Metaliko intends on immediate drilling of the many prospective gold targets within the project tenements and aims to establish gold resources of sufficient grade for economical mining at current gold prices.

Arrangement of the release or replacement of the environmental bonds is required by 31 July 2014.