Rio Tinto sells Kelian gold plant for $15 m

London-based miner Guinor Gold Corporation announced Friday that it had entered into a Heads of Agreement to purchase the existing Kelian Carbon In Leach (CIL) gold plant in East Kalimantan from a subsidiary of Rio Tinto PLC.

The plant would be utilized to expand production at Guinor's 85 percent owned Lero Gold mine in Guinea, West Africa. Completion of the transaction is subject to the parties entering into a definitive Sale and Purchase agreement, said the company.

The overall cost to purchase the facility, which consists of a metallurgical plant, power plant, substantial accessories and spares (including dismantling, packaging and loading onto barges) will be US$15 million. A US$1 million deposit will be required to be paid when a definitive Sale and Purchase Agreement is entered into later this year.

The plant is expected to become available by the end of the first quarter next year and progress payments will be made as the dismantling, transportation and re-building program occurs through 2005.

PT. Kelian Equatorial Mining (KEM), which is 90 percent owned by Rio Tinto had ceased ore mining operations and is expected to end ore processing early next year. KEM commenced gold production since 1992. (alex)