Vancouver – Nunavut gold explorer Committee Bay Resources (CBR-V) is merging with Australian focused Matador Exploration (MXN-V).
The agreement has Committee Bay issuing 0.72 of a share for each Matador share, plus finance Matador through a convertible debenture for acquisition of specific assets in the Coolgardie gold district of Western Australia.
To fund Matador’s planned acquisitions, Committee Bay has lined up a $6-million private placement financing through a brokerage syndicate led by Canaccord Capital. The placement will include both flow through and non-flow through units.
The combination creates a company holding two advanced-stage gold projects in different regions of the world, allowing year round exploration capability.
Committee Bay holds a 45% interest in its namesake gold project, which covers about 6,500 sq. km of Committee Bay Greenstone Belt in Nunavut. Joint venture partner Gold Fields (GFI-N) holds 55% interest. The junior recently reached a deal with Gold Fields (TNM, May 13/05) to regain operatorship of the project and plans to spend $10 million in exploration over two years. The major will then have a one time right to convert its 55% interest into 7 million Committee Bay shares, or retain its interest by funding further programs equivalent to 150% of expenditures incurred by Committee Bay.
Extensive drilling in 2004 led to an inferred resource calculation of 5.1 million tonnes grading 4 grams gold per tonne (657,000 oz. contained) at the iron formation hosted Three Bluffs deposit.
Matador Exploration’s primary asset is its operations in Western Australia’s Coolgardie gold district, where it has been active for over a decade. In early-2005, the company entered into an agreement to earn 50% interest in the Redemption joint venture, from Aussie-listed Austminex, which consists of past producing The Mount and Coolgardie gold projects.
The Mount, located about 85 km south of Barrick Gold’s (ABX-T) and Newmont Mining’s (NEM-T) Golden Mile Superpit at Kalgoorlie, had minor historic production of 26,000 oz. of gold and hosts an inferred resource of 2.1 million tonnes grading 5.2 grams gold (350,000 oz. gold contained) compliant to the Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC).
The Coolgardie project, located about 35 km southwest of the Superpit, produced over 2 million oz. of gold with a current JORC-compliant indicated and inferred resource of around 17 million tonnes averaging 2.2 grams gold (1 million oz. gold contained) in several deposits.
To earn its 50% interest in the Redemption JV, Matador is responsible to fund Aus$10.75 in acquisitions and exploration expenditures over three years. The JV is also acquiring the Three Mile Hill gold processing plant, from Aussie companies Herald Resources and Leviathan Resources, which has a 1.2 million tonnes per year capacity.
Matador also has its whollyowned Jaurdi Hills project, about 70 km west of the Superpit, which has seen historic production of 30,000 oz. of gold.
Upon successful completion of the business combination, the new company will hold over one million oz. of gold resource in two greenstone belts with near-term production aspirations from Western Australia.
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