Frontier Signs Heads of Agreement to Acquire 80% of the Gold Ridge Mine/Project Consideration is equity in FNT shares and deferred carry of GCIL's 20% interest into production Frontier Resources Ltd (ASX : FNT) (Frontier or the Company) is extremely pleased to announce it has signed a Heads of Agreement with GoldRidge Community Investment Limited (GCIL), the Solomon Islands Landowner company that owns 100% of the Gold Ridge Mine/Project on Guadalcanal Island. ASX listed mid-tier gold producer, St Barbara Limited sold the suspended Gold Ridge Mine/Project to GCIL on May 1st 2015. Consideration to new partner GoldRidge Community Investment Limited for Frontier acquiring 80% of the Gold Ridge Mine/Project, is a 20% deferred carried interest into production, repayable from 50% of GCIL's pro-rata share of future profit, plus the issuance of 19.9% share equity in Frontier, plus the deferred issuance of 4.98% share equity in Frontier one year from the Commencement of the Joint Venture, Venture provided that GCIL’s interest does not exceed 19.9% of the issued capital of the Company. Gold Ridge is a low strip ratio gold mine with multiple open pits and a 2.5 million tonne per annum Carbon in Leach processing plant; it is located in the highly mineralised Charivunga Valley, about 40km south-east of the capital of Honiara. The Mine includes the Kupers, Dawsons, Namachamata and Valehaichichi pits and all are located in close proximity to the processing facility. Total Mineral Resources were estimated to contain 3.18 million ounces of gold, within 64.2 million tonnes grading 1.5 g/t gold (St Barbara Limited Gold Ridge Resources and Reserve Statements dated June 30th 2014 and issued to the ASX on August 27th 2014 and that Table below). Total Ore Reserves were estimated to contain 0.67 million ounces of gold, within 14.6 million tonnes grading 1.4 g/t gold. The Total Reserves are included within the Total Resources, are tabulated below by area and were reported with the qualification that they are economic based on the on-going mine plan, but the operation was suspended.
Key terms of the Heads of Agreement to form a Joint Venture (JV) (subject to shareholder and regulatory approvals) are: GCIL will grant Frontier an 80% direct interest in the Project (i.e. Frontier will be transferred 80% of GCIL's shares in Australian Solomons Gold Pty Ltd (ASGL), the ultimate holder of the Project). Frontier will carry GCIL's portion of the capital and operating costs in ASGL that are required to recommence mining /processing and exploration on a loan account. Frontier will be repaid by GCIL from 50% of its portion of future profits. Frontier will issue GCIL shares in Frontier so that GCIL will hold a 19.9% interest. GCIL will then own a total direct and indirect interest in the Mine / Project of 35.9%. GCIL will (when appropriate) sell one quarter of its 19.9% equity in Frontier to obtain operating capital and will budget it to meet its goals, establish appropriate businesses and assist the community. Frontier will issue GCIL a deferred 4.98% of the Company's share capital, in ordinary shares, one year after the Joint Venture Commencement date, Venture provided that GCIL’s interest does not exceed 19.9% of the issued capital of the Company. GCIL will appoint 1 Executive Director to the Board of FNT- Landowner Paramount Chief Mr Walton Naezon. The Heads of Agreement forms the basis of the proposed Joint Venture Agreement; it grants Frontier an exclusivity period to the end of June 2015, however, both parties aim to finalise the JV Agreement by May 29th 2015, if possible. Frontier has no knowledge of any impediments to finalising the JV Agreement.
{PLUS more}
Expand
(20min delay)