ATW Venture buys gold mine Down Under

Vancouver – ATW Venture (ATW-V) has cut a deal to buy a gold mining operation in Western Australia along with a significant land package within a historic gold belt.

It is purchasing the Burnakura gold mine project, located in the Archean greenstone terrain of the West Yilgarn goldfields, from Tectonic Resources (TTOSF-O, TTR-A) and Extract Resources (EXT-A) for Aus$4 million and issuance of 5 million shares plus warrants (exercisable for 3 years at 79 apiece).

Burnakura was first run as a shallow, open pit operation in the 1990s — exploiting near surface oxide mineralization to provide ore feed for a nearby operation.

The Aussie partners developed underground operations in 2005 — sinking a decline beneath one of the previous open cuts. Milling of ore commenced in late-2005 and but ceased in early in 2007, after about 30,000 oz. of gold production, with both Tectonic and Extract changing commodity focus to base metals and uranium respectively.

The duo tabled a revised JORC-compliant resource estimate for NOA2 in early-2007 following suspension of operations, reviewing 261,000 measured and indicated tonnes averaging 7.8 grams gold per tonne plus a further 143,000 inferred tonnes at 5.4 grams gold for a contained metal inventory of about 90,000 oz.

Additionally, Tectonic and Extract established a global resource tally of 907,000 measured and indicated tonnes averaging 5.2 grams gold plus an additional 2.9 million inferred tonnes of 2.6 grams gold on its 58.8-sq. km tenement package a total of about 391,000 contained oz. gold.

Most of the reported resources are generally shallow, less than 100 metres below surface, with very little deep drilling undertaken.

ATW Venture points out that although controls on mineralization have not been well understood — underground operations have shed light on an east-west structural component thought to be important in hydrothermal activity and gold emplacement.

Concurrent with its acquisition ATW has enlisted PI Financial and Haywood Securities for a planned $8.4-million financing to float the Burnakura deal and provide working capital.

The company intends to sell 14 million subscription receipts at 60 apiece with receipts exercisable, at no cost, into units comprised a share and a half warrant. Warrants are exercisable for two years from release of escrowed funds at an anticipated price of 80.

Broker agents will reap a 7% commission of gross proceeds (about $588,000) plus additional compensation options, equal to 8% of the subscription receipts sold (about 1.12 million options), exercisable to buy shares at 65 apiece over two years.

ATWs acquisition includes a 440-tonne-per-day capacity CIL (carbon in leach) plant plus infrastructure including offices, workshops and a 90-person camp.

Following some modest refurbishment of the Burnakura plant, ATW targets annualized gold production of about 42,000 oz. by Q3-2008.

Shares of ATW Venture, which had been halted at 63 prior to the announcement, gained 12 to 75 apiece on the acquisition agreement. The stock has a 52-week trading range of 40-$1.46.