This thing should pop this week. A pretty dismal market cap for...

This thing should pop this week. A pretty dismal market cap for a company with exposure to gold production in 12 months time and no capital overhang...

Miningnews.net piece today....

Tasman soars on $25M JV deal

Colin Jacoby
Monday, 13 July 2009

SHARES in Tasman Goldfields jumped more than three-fold today on news it has inked an option agreement for a $A25 million joint venture with private resources company AusCan Gold.



Brisbane-based Tasman said the JV deal with AusCan covered the development of its Challenger and Mt Adrah gold projects in New South Wales.

If the JV deal goes ahead, Tasman will receive $14 million in funding from Auscan to bring Challenger into production within 12 months.

The funding will consist of $500,000 for pre-development work, $3.5 million to begin initial development works and $10 million to complete development and begin mining operations.

The Challenger project is expected to produce 32,000 ounces of gold per year for an initial mine life of three years.

In addition, the JV gives AusCan the option to provide $11 million in funding to develop Tasman’s Mt Adrah gold project.

“The successful completion of the development of the Challenger project into a mining operation is expected to provide significant cash flow to Tasman during the next four years, and the prospect of also developing the Mt Adrah project may further extend the company’s cash flow profile,” Tasman Goldfields managing director Geoffrey Checketts said in a statement.

Under the terms of the deal, Tasman will issue 2.5 million shares at 8c per share to AusCan to raise $200,000, to be completed on or before July 22, and grant AusCan an option to enter into the joint venture.

The option is exercisable by August 24.

News of the JV deal saw Tasman’s share price soar 5.4c, or 270%, to an intraday high of 7.4c at midday.