A merger agreement between Australian-listed
The deal will see Champion, part of the Lundin group of exploration companies, raise $3 million and consolidate its shares at a 3:1 ratio, provided shareholders approve. Red Back shareholders get one share of the consolidated company for every three Red Back shares; the new company will also take the Red Back Mining name.
Red Back shareholders would own about 87% of the new company, which would pursue a Toronto Stock Exchange listing.
Red Back’s principal asset is a 95% interest in the Chirano gold project in Ghana, about 15 km south of the Bibiani gold mine, operated by
A feasibility study by Perth-based Lycopodium Pty. indicates the deposit could be mined as an open pit at an annual rate of 130,000 oz., with recovery by conventional milling. Optimization studies on the pits suggest a further 8 million tonnes of the resource could be brought into reserves at present gold prices.
Red Back has a right of first refusal on the plant at the Obotan mine in Ghana, owned by Australian gold producer
Red Back also holds a property in the Ashanti gold belt, which the new company will retain.
Several permits Red Back has applied for in northern Ghana, along with a portfolio of Australian nickel and gold projects, will be spun-off into a listed Australian company whose shares will be distributed to Red Back shareholders.
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