5th Oct 2016 06:47
LONDON (Alliance News) - Keras Resources PLC on Wednesday said it has completed the acquisition of the Klondyke gold project and the option that will give it the right-to-mine in the Pilbara mining district in Western Australia.
Keras originally signed the deal to purchase Klondyke last month and plans to settle the AUD1.4 million consideration, equal to around GBP800,000, in cash. Keras will also issue 100.0 million new shares at 0.62 pence per share to Haoma Mining NL - worth a total of GBP620,000.
"The completion of the Klondyke transaction is a significant milestone for the company. The consolidation of the Warrawoona Greenstone Belt, through this transaction and the Haoma right to mine and option to purchase agreement, has created the critical mass of mineralised lease area to underpin our intention to be to a stand-alone, owner-operated gold miner," said Managing Director Dave Reeves on Wednesday.
The right-to-mine and option-to-purchase agreement covers tenements contiguous and near to Klondyke.
Keras has secured a USD2.0 million bridge facility to help fund the cash consideration and costs associated with the deal. On Wednesday, Keras said the facility will mature in six months and carry an interest rate of 10% per six months, with an additional 5.0% fee payable. The providers of the facility can convert outstanding balances into Keras shares, if they are willing to pay a 20% premium to the company's share price at the time.
For the first drawdown, Keras has issued GBP389,350 worth of warrants to subscribe for new shares in the company at a price of 0.8501 pence over the next two years, it said.
Klondyke has a "scalable" resource of 5.6 million tonnes of ore graded at 2.08 grammes of gold per tonne of ore, providing 374,000 ounces of gold. Importantly, that only lies within 2.0 kilometres of the much larger, 7.5 kilometre strike that has already been identified. Strike is also open at depth.
Keras said a drill programme will be launched immediately to gain a better understanding of the geology and confirm historic results in parallel with detailed mapping and review of the entire area.
The 100.0 million shares to be issued will represent around 7.0% of the enlarged share capital of the business.
By Joshua Warner; [email protected]; @JoshAlliance
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