Aurora to sell Mt Muro project

Australian listed gold miner Aurora Gold Limited announced Friday that it had entered into Heads of Agreement to sell its interest in PT Indo Muro Kencana which holds the Group's Mt Muro Gold and Silver Project in Central Kalimantan, to Archipelago Resources Limited.

Aurora said the sale is expected to be completed on 31 July 2002, and subject to satisfaction of certain conditions precedent, including completion by Archipelago of due diligence.

According to Aurora, under the Heads of Agreement it will received US$750,000 in cash within 90 days of production recommencing; US$1 million in Archipelago shares on listing; and receive an uncapped 2 percent gross royalty on gold and silver production from the prospective "Western Areas" of the Mt Muro Contract of Work.

Aurora said it will also responsible for the reclamation of existing mining areas and paying out all employee entitlements up to the sale completion date.

Over its 8 year mine life Mt Muro goldmine has produced approximately 1.7 million gold equivalent ounces.

Aurora expects to cease mining operations at Mt Muro within the next month and complete the reclamation of existing mining areas before sale completion.

Archipelago, which last month purchased Aurora's Toka Tindung Project in North Sulawesi is intending to seek listing on the London AIM market. (robert)