CGA Mining (CGA-T, CGX-A) has entered a deal with Thistle Mining (THTLF-O, TMG-L) to take over the Masbate gold project in the Philippines for US$30 million in cash and another US$21 million worth of shares.
Under the deal CGA, the former Central Asia Goldfields, would take over Thistle subsidiary Philippine Gold, and would have a 40% interest in a Philippine-domiciled subsidiary to be set up as a result of the deal. It would also hold an option to acquire the remaining 60% of the new company. Thistle would receive US$25 million immediately, US$5 million within six months, and about 41.5 million shares of CGA. The placement would give Thistle a 25% interest in CGA.
Masbate has an indicated resource of 59.3 million tonnes grading 1.55 grams gold per tonne, and an inferred resource of 33.7 million tonnes grading 1.63 grams per tonne. Feasibility work put the project’s probable reserve at 37.4 million tonnes at a grade of 1.65 grams per tonne, based on a cutoff grade of 0.7 gram per tonne and a gold price of US$450 per oz.
Capital costs to develop Masbate were estimated at US$93 million in a feasibility study done for Thistle. The study showed a cash cost of US$339 per oz. (with oil prices at US$50 per barrel), and the mine would produce an average of 171,000 oz. annually for 9.5 years.
In October CGA, then still under the Central Asia Gold name, came to a settlement of its dispute over development of the Taldy Bulak gold deposit in Kyrgyzstan. CGA received US$15 million from the Kyrgyz government and from Kyrgyzaltyn, the state mining agency, to relinquish its stake in the project.
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