Bendigo Mining has entered into an agreement with Barrick Australia to acquire the Henty gold mine located on the West Coast of Tasmania, giving Bendigo its second underground operating gold mine.

Bendigo will pay Barrick A$5m in cash, A$3m in equity shares and royalties of about $22m from future production from the mine.

The deal also includes the transfer of the process plant, infrastructure, mineral tenements and 92 employees.

To realise the potential benefits of this acquisition and increase mine life beyond Barrick’s scheduled closure date of December 2009, Bendigo plans to invest significantly in exploration and development, the company said.

The mine fits Bendigo’s growth strategy as it provides immediate gold production and significant exploration potential combined with a low-risk financing structure, Bendigo managing director Rod Hanson said.

“Importantly, the acquisition is consistent with Bendigo’s strategy of building a profitable mid-tier gold
company. It is also a very good operational fit with the Kangaroo Flat Mine in Bendigo, given Henty’s
similar nature of operations and excellent potential for additional gold resources,” Hanson said.

Bendigo plans to mine and process about 130,000t at a grade of 6g/t gold to produce about 20-25,000oz of gold by the year end.