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 in the gold property, in Western Australia. The funds will be earmarked for ongoing exploration on its Nunavut landholdings and potential acquisitions.
In a statement, Committee Bay president and CEO John Williamson said the company has invested $13.4 million in Redemption since 2005, increasing the project’s value considerably.
“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,” Williamson said.
Subject to approval of Focus Minerals shareholders, Committee Bay will receive 140 million shares in the Aussie junior, giving it an 11% interest — after planned financings by Focus.
As part of its Redemption plans, Focus intends to raise roughly A$34 million in addition to its payments
to Committee Bay. A proposed equity financing will be composed of roughly 327 million shares at A5.5 apiece (for A$14 million) plus a share purchase plan with existing shareholders for another A$4 million. The company is also negotiating a loan for A$18.6 million.
The 210-sq.-km Redemption 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 ounces gold in several deposits. The project also contains another 11.5 million inferred tonnes at 2.8 grams gold (1.04 million contained ounces gold).
Focus forecasts initial gold production from the Perseverance mine by April 2008 with several other deposits being evaluated for development. Perseverance is expected to produce 76,500 oz. gold over its first 21 months with the ore being processed at the nearby Greenfields gold plant — a third-party facility owned by Higginsville Mining.
A refurbishment program on the fully permitted Three Mile Hill mill at Redemption — a 1.2-million-tonne- per-year processing facility — is anticipated to begin late this year, and completed within six months.
On the news, Committee Bay shares gained about 10%, inching up a few pennies to 36. The stock has a 52-week trading range of 26-58.
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