Galane Gold has signed a letter of intent (LoI) for the acquisition of all outstanding shares of Vantage Goldfields Limited, a gold mining company with operations in Mpumalanga province, South Africa.
The LoI is expected to be followed by the signing of a binding acquisition agreement, which will include detailed terms of the acquisition and other necessary requirements including completion of legal and technical due diligence, delivery of a 43-101 technical report by Vantage and receipt of all other regulatory and third-party approvals.
The final aspect of the acquisition will be determined by Galane and Vantage to include various legal, tax and accounting terms. The LoI is not binding and could be terminated by mutual consent or if the acquisition agreement and documents related to the deal have not been entered by 16 June.
Galane Gold CEO Nick Brodie said: "This represents another significant step towards Galane’s stated goal to reshape the Company into a long-life and low-cost operation that can produce positive returns for investors across commodity cycles. The Vantage mines are located within 30km of our existing operations at Galaxy Gold and obvious synergies exist between the two operations.
"We hope to leverage these synergies to create an operating asset in the Barberton area, which together with the company’s Galaxy property, is expected to result in a combined resource exceeding 5,800,000oz, production of over 160,000oz per annum and an all in sustaining cost of less than $900 per ounce.”
An Australian firm, Vantage has mining assets in the Barberton Greenstone Belt (BGB), close to the town of Barberton in the Mpumalanga province, South Africa. The assets include several historical mining operations on the BGB, as well as prospecting rights comprising an area of around 160km.
Last year, Vantage’s Barbrook Mine and Lily Mine suspended operations and were placed in 'business rescue', which is a type of creditor protection under the South African law.
A plan has been put forward by Vantage management, which has been agreed by the business rescue practitioner. This plan would see recommencement of operations within 90 days of completion of the acquisition.