Junior miner gets WA gold project for $35m

Mr Kennedy, chief executive of Lonrho Mining, is a board member of Sandfire.

He said Fortnum was ready to be restarted despite being shut down in May, 2007, when previous owner Gleneagle Gold went into receivership amid low gold prices.

The site includes a 1.2 million ounce resource with a mine life of at least 10 years and a processing plant.

Mr Kennedy said that would give Resource and Investment the opportunity to be a gold producer in less than 18 months and to consolidate a world-class exploration portfolio.

“The nice thing about this acquisition is that the plant is there, there’s a 100-man camp complete with swimming pool, airstrip, water licences and all the licences in place,” he told AAP.

“It will be a two-pronged attack, to get the plant running and producing 50,000 ounces a year from the known gold deposits.

“And equally exciting for us is the very large land package taking us to over 2000sq km (including existing land owned by the company).”

When Gleneagle went into receivership, gold prices were as low as $400 to $600 per ounce, with production costs of about $800 per ounce.

If prices stayed near current levels of above $1600 – after climbing above $1800 in 2011 – the company would post a $35 million profit in its first year of production, paying for the acquisition, Mr Kennedy said.

The company hopes to uncover more gold deposits at 100 existing drill holes, along with copper in the region.

The company’s shares fell four cents to 60 cents on Monday.

Posted by admin on Jan 9 2012. Filed under Gold mining. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry