Prosperity acquires more gold mines in Aceh

ASX-listed mining firm Prosperity Resources Limited, through its 81% owned Indonesian unit, PT Prosperity Surya Persada (PSP) has reached an agreement to acquire two additional 5,000ha licenses (KPs) to the northwest of its existing PinangPinang gold-copper project in Aceh Province .

Prosperity has signed separate agreements with PT Bintang Agung Mining (BAM) and PT Mulia Kencana Makmur (MKM). The terms of the agreement are identical. The agreements allow for the subscription for 80% of the shares in PT BAM and PT MKM, the company said.

PSP will earn an 80% shareholding interest in PT BAM and PT MKM through total exploration expenditure of US$1.25 million on each project over a two year period and granting of ten million fully paid ordinary shares in Prosperity Resources Ltd for each project area.

PSP has until 31 January 2010 to complete its due diligence and can terminate the agreement without penalty, it added.

The northern most 5,000 ha KP is held by PT Bintang Agung Mining (BAM) and the adjoining KP to the south is held by PT Mulia Kencana Makmur (MKM).

The location and mapping completed indicates that the BAM and MKM license areas are highly likely to host a similar style of porphyry-related mineralisation to that being defined within the Pinang-Pinang Project area.

Prosperity will conduct a legal and technical due diligence on the BAM and MKM projects. The technical due diligence will include a regional mapping and sampling program to determine the prospectivity of the areas.

Upon delineation of a JORC code compliant resource of between 500,000 and 1 million gold ounces, a further pro rata amount of between two and a half million and five million fully paid ordinary shares in Prosperity Resources Ltd will be payable to BAM and MKM.

The maximum amount of shares payable will be five million and no shares will be payable for a resource of less than 500,000 ounces.

PSP has the right to acquire a further 10% shareholding interest in BAM and MKM by paying the vendors 10% of the net present value of the projects as determined by an independent expert at the time. The current shareholders of BAM and MKM will retain a 10% free carried interest in the projects giving Prosperity Resources Ltd the right to earn 72.9% interest in each project, it added. (denny)