Queenstake closes Jerritt deal

Queenstake Resources (QRL-T) has acquired the Jerritt Canyon gold mine in Nevada’s Elko Cty., after wrapping up a previously announced brokered private placement of 105 million subscription receipts for proceeds of $21 million.

Each receipt allows the holder to buy one share and half a share purchase warrant. A whole warrant allows the holder to buy one share at 25 for two years.

Queenstake acquired the mine from AngloGold (AU-N) and Meridian Gold (MNG-T) by issuing 32 million shares and paying US$1.25 million in cash, plus a non-refundable US$250,000. Another US$6 million is due in quarterly $1-million instalments between June 2005 and September 2006, or earlier if project debt is paid off ahead of time. The two vendors retain a royalty capped at US$4 million.

AngloGold, which owned 70% of Jerritt and operated the mine, and Meridian, which had the remaining 30%, are sharing the proceeds and the net smelter return royalty on a pro rata basis.