Committee Bay selling Aussie holdings

Vancouver – Committee Bay Resources (CBR-V, CBYRF-O) has inked a deal to sell its 50% interest in the Redemption joint venture to Australian-listed partner Focus Minerals (FML-A).

It will receive $30 million roughly $20.25 million in cash and $9.75 million in shares of Focus Minerals for its interest. The funds will be earmarked for ongoing exploration on its Nunavut landholdings and potential acquisitions.

“Since acquiring the Redemption JV project in August 2005, Committee Bay has invested approximately $13.4 million (at today’s exchange rate) and leveraged its exploration expertise to increase the value of the project substantially. Today we are receiving over twice our investment in cash and shares, while retaining the upside exposure to the success of the project through our shareholding in Focus,” commented John Williamson, Committee Bay president and CEO in the news release.

Subject to Focus Minerals’ shareholder approval, Committee Bay’s receipt of 140 million shares in the Aussie junior will give it an approximate 11% interest — after planned financings by Focus.

As part of its Redemption JV consolidation plan Focus also intends to raise roughly Aus$34-million in addition to the funds to be paid to Committee Bay. A proposed equity financing will be comprised of roughly 327 million shares at Aus5.5 apiece (for Aus$14 million) plus a share purchase plan with existing shareholders for a further Aus$4 million. The company is also negotiating a debt facility for Aus$18.6 million.

The 210-sq. km Redemption joint venture land package — in Western Australia’s Coolgardie greenstone belt — hosts measured and indicated resources of 9.1 million tonnes grading about 2 grams gold per tonne for about 595,000 contained oz. gold in several deposits. A further 11.5 million inferred tonnes at 2.8 grams gold (1.04 million contained oz. gold) has also been reviewed on the tenements.

Focus forecasts initial gold production from the Perseverance mine by April-2008 with several others deposits being evaluated for development. Perseverance is expected to output 76,500 oz. gold over its initial 21 months with the ore being processed at the nearby Greenfields gold plant a third-party facility owned by Higginsville Mining.

An expected refurbishment program on the JV’s fully permitted Three Mile Hill mill – a 1.2-million-tonne-per-year processing facility is anticipated to commence in late-2008 and finished within six months.

Following news of its Aussie mineral divestiture shares of Committee Bay gained about 10% notching up a few pennies to the 36 level. The stock has a 52-week trading range of 26-58.