White Dam Gold Project Location Map
Perth, Mar 10, 2009 AEST (ABN Newswire) - Exco Resources Limited (ASX:EXS)(PINK:EXRSF) and Polymetals Group Pty Ltd. have agreed the final structure of the Joint Venture Agreement envisaged by the Heads of Agreement (HOA) entered into on 27 March 2008 in relation to the White Dam Gold Project.
The White Dam Gold Project, which is located in South Australia approximately 80 kilometres west of Broken Hill, is an advanced development project containing a resource inventory of 330,400 ounces of gold. Subject to final approvals being obtained, the parties anticipate that the project can commence construction in mid 2009, with first gold production scheduled by late 2009/early 2010.
Polymetals will acquire a 25% interest in the project for a consideration of A$2.8m. The consideration will be settled by the recognition by Exco of A$1m of expenditure on the project by Polymetals since the date of the HOA, and a payment of A$1.8m in cash upon the signing of the Joint Venture Agreement documentation.
Exco and Polymetals will also enter into a management agreement, appointing Polymetals as project manager. Polymetals prior ownership and involvement in the White Dam Gold Project provides them with a significant advantage as project manager.
Polymetals is a privately owned company specialising in the development of remote small to medium size resource projects. In-house expertise includes metallurgy, mining and overall project management.
Resource project successes have been due to Polymetals' ability to develop and operate very cost effectively often implementing novel processing options as is evident from their track record with projects such as the Hellyer Zinc Concentrate Project in Tasmania.
Finalisation of the Joint Venture arrangements will allow the partners to move forward on financing and prompt implementation of the project to take advantage of the currently favourable gold price environment Exco's share of prospective cash flows from the White Dam Project will ultimately assist in expediting the preferred development strategy for its other projects, including the highly prospective portfolio of Cu-Au-U3O8 projects in the Cloncurry district of NW Queensland.
White Dam Gold Project Resource Summary
(0.5g/t cut-off grade applied at White Dam; 0.7g/t cut-off grade applied at Vertigo)
----------------------------- Type Indicated ----------------------------- Tonnes(T) Au g/t -----------------------------White DamOxide 5,529,000 1.12 White DamFresh 493,000 1.13 Sub -Total 6,022,000 1.12 Vertigo 1,785,000 1.28 -----------------------------TOTAL 6,022,000 1.12 -----------------------------
------------------------------ Type Inferred ------------------------------ Tonnes(T) Au g/t ------------------------------White DamOxide 8,000 1.59 White DamFresh 1,288,000 0.96 Sub -Total 1,296,000 0.96 Vertigo 1,785,000 1.28 ------------------------------TOTAL 3,081,000 1.14 ------------------------------
----------------------------------- Type Total----------------------------------- Tonnes(T) Au g/t Ounces-----------------------------------White DamOxide 5,538,000 1.12 199,900White DamFresh 1,781,000 1.01 57,600Sub -Total 7,318,000 1.09 257,400Vertigo 73,000-----------------------------------TOTAL 9,103,000 1.13 330,400-----------------------------------
Contact
Michael Anderson
Managing Director
TEL: +61-8-9211-2000
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