Dioro Exploration NL will acquire the gold assets of South...

Dioro Exploration NL will acquire the gold assets of South Africa's Harmony Gold in Western Australia in a deal worth $45 million.

The acquisition of the South Kalgoorlie mining operations of Harmony, one of the world's largest gold miners, will add about 80,000 ounces of gold a year to Dioro's production output.

After the deal is completed, Dioro will have a total attributable resource of 2.6 million ounces of gold.

Dioro is offering Harmony $25 million in cash and 160 million Dioro shares worth $20 million for the assets in the heart of one of the world's most productive gold belts.

"We have acquired a significant asset package in an area in which we already have a strong presence and which we believe is one of the most prospective for gold in the world," Dioro managing director Rhod (Rhod) Grivas said.

"We have acquired these resources for a cash outlay of less than $14 per ounce and a total consideration cost of $24 per ounce."

Harmony's assets in South Kalgoorlie include the Jubilee mill, three years of reserves at current production rates and a resource inventory of approximately 1.878 million ounces.

It is a large, highly prospective tenement package covering an area of in excess of 1,100 square kilometres.

Dioro said the acquisition offers significant synergies, with a number of gold projects in the area requiring milling capacity.

The mill can process ore from Dioro's 49 per cent-owned Frogs Leg mine and ore reserves to be developed at the nearby Penfold Gold Project, 100 per cent owned by Dioro.

"We have acquired an operating mill, which will create cost savings for Dioro as it mills its own ore and a potential revenue stream from contract milling of ore from nearby projects," Mr Grivas said.

"We have also acquired a significant resource inventory, which we hope to increase through aggressive exploration on our acquired and existing tenements."

The acquisition is subject to Dioro shareholder approval, the completion of a capital raising for at least $35 million and regulatory approvals.