Kingsrose updates Indonesian gold/silver project
Thursday, July 31 2008 - 04:10 AM WIB
WAY LINGGO ACQUISITION
On 28 April 2008, the Company announced that it had signed a Letter of Intent to acquire 85% of the advanced Way Linggo underground high grade gold/silver project in South Sumatra, Indonesia.
In pursuing this acquisition, the Company believes that shareholders will receive early benefits due to:
? the advanced nature of the project;
? the modest amount of capital to complete construction;
? the expected low unit cash cost/oz of production; and
? the exploration potential for more high grade epithermal mineralisation on the Company?s 10,540 hectare Contract of Work.
Whilst the due diligence process has taken a little longer than expected, site progress has continued with commissioning now expected in the March 2009 quarter at a forecast annualized production rate of 30,000 ozs Au Eq. The capital requirement to complete construction is expected to be approximately A$8 million.
An interim loan facility taken out by the project vendors has enabled the ball mill to be secured along with other equipment required for the on-site processing plant. This interim funding facility has also ensured that underground mine development continues, with a total of 280 metres of level development now completed (including four separate crosscut intersections of the orebody at two different horizons), as well as the continuation of ongoing low cost surface exploration in the immediate mine vicinity. The acquisition will involve the repayment of approximately A$4 million of vendor loans and the interim facility.
The Independent Board Committee comprising Non-Executive Director, Mr Dennis Franks and Managing Director, David Hatch has been directing the completion of technical, accounting and legal due diligence on behalf of shareholders, which was essentially complete at the time of writing. Corporate due diligence is proceeding, with draft documents including the Share Purchase Agreement (SPA), Loan Arrangements Deed (LAD), Explanatory Memorandum to Shareholders (EM) and Independent Expert?s Report (IER) in circulation. Following the execution of the SPA and LAD, documents will be forwarded to ASX and ASIC for review prior to dispatch to shareholders, which is expected in early August. (end of excerpt)