Royal Oak Mines (TSE) says it will buy all of the processing facitilies of ERG Resources from a secured creditor for $1.79 million.
Royal Oak says it will not incur any liability for ERG’s past activities or responsibility under mining or environmental legislation as a result of the transaction.
ERG established the facility in the late 1980s in a failed attempt to recover gold from the large quantity of mine tailings generated since gold mining began in the Timmins area in 1912.
Royal Oak has offered to pay the purchase price by issuing 620,000 common shares and the balance in cash.
Royal Oak also says that a recent gold pour at its Hope Brrok gold mine Newfoundland brings gold production there to 3,764 oz. since June 28 when the operation reopened. The company expects the mine to be operating at its design capacity by November when it should be producing at the rate of 130,000 oz. annually.
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