RNC will host a call/webcast
today at 10:00
a.m. (Eastern Time) to discuss the agreement. North
American callers please dial: 1-888-231-8191, international callers
please dial: (+1) 647-427-7450. For the webcast of this event click
[here] (replay access information
below).
TORONTO, March 26, 2019 /CNW/ - RNC Minerals (TSX:
RNX) ("RNC") is pleased to announce that it has entered into a
purchase option agreement (the "Purchase Option") with Westgold
Resources Limited ("Westgold") for its Higginsville Gold Operation
("HGO"). The acquisition of the Higginsville operations and its
modern, low cost 1.3 Mtpa gold mill would provide a key piece of
RNC's strategy to unlock the significant potential of its Beta Hunt
gold mine. The Higginsville mill would provide a significantly
lower cost milling alternative for Beta Hunt (RNC expects that
processing cost savings would be in excess of C$15 per tonne, or a 35% reduction), and add an
expected 40-45 koz of gold production in 2019. HGO has a 367
thousand ounce reserve within a 1.2 million ounce measured &
indicated gold resource, and a further 0.9 million ounce inferred
resource, all located on a 386 km2 land position in the Kalgoorlie
gold region. RNC successfully tolled Beta Hunt material through the
HGO mill in 2018, achieving 94% Au recovery.
RNC will make a non-refundable option payment of A$4 million, payable immediately in RNC shares,
for an exclusive 40-day period to complete due diligence. Closing
would occur 30 days later if the Purchase Option is exercised. On
closing, RNC would pay a further A$21
million in RNC shares and A$25
million in cash for total consideration of A$50 million (including the A$4 million deposit satisfied in RNC shares).
Mark Selby, President and CEO of
RNC, commented "The combination of the Higginsville Mill with the
production potential of our Beta Hunt mine provide significant
synergies, underpinned by the 35% per tonne cost saving or in
excess of US$100/oz versus our
current toll milling arrangements. The transaction would transform
RNC's gold operation in Western
Australia to a multi-mine operation anchored by the 1.3 Mtpa
HGO Mill, the exciting high grade and substantial resource
potential at Beta Hunt, and a large land position in the Kalgoorlie
gold region. The option structure allows RNC to assess a full range
of financing options and ultimately choose the most accretive
solution for shareholders."
Selby continued: "The timing of this transaction is helpful as
our drilling program has sufficiently advanced to allow for
commencement of a limited restart of bulk mining in areas with mine
development already in place. The timing for a full ramp-up
decision has remained the same and will be based on completion of
the resource update expected by the end of the second quarter. We
are pleased to partner with Westgold, a very experienced and
well-respected operator in Western
Australia, who recognizes the potential of RNC's Beta Hunt
mine. "
Westgold Managing Director, Peter
Cook said, "This is a sensible transaction that gives both
RNC and Westgold solutions for their project needs. The addition of
the high grade gold discoveries and resource potential at Beta Hunt
to the existing operation at Higginsville will provide enhanced
gold output at lower costs, as well as security from ownership of
substantial plant and infrastructure."
The transaction is subject to, among other conditions, execution
of a definitive purchase agreement, satisfactory due diligence by
RNC, TSX approval and Australian regulatory approval.
Overview of HGO
- 1.3 Mtpa gold processing plant, including a gravity gold
recovery circuit with Knelson concentrator followed by an Acacia
high intensity leach reactor.
- The plant was built in 2007, along with associated
infrastructure including a tailings storage facility.
- There are several operating and previously operating
underground and open pit gold mines on the property. Mining at HGO
occurs primarily at the Mt Henry open pit with ore being hauled to
the processing plant. Westgold expects to produce 40-45 koz of gold
during 2019 at an average AISC of US$1,000-$1,050
(A$1,400-A$1,450) per ounce. Additional revenue will also
be generated from an existing toll milling contract.
- Significant exploration potential, with 200 mining titles
comprising over 38,600 hectares in the prolific gold region between
Kambalda and Norseman.
On October 2, 2018 Westgold
published its JORC compliant Annual Update of Mineral Resources
& Ore Reserves as of June 30,
2018. For HGO, tables 1 and 2 below summarize the
update.
Table 1: Higginsville Gold Operations Mineral Resource
Statement (rounded for reporting)1
Category
|
Tonnes
(000s)
|
Grade
(g/t)
|
Ounces
(000s)
|
Measured
|
3,118
|
2.20
|
220
|
Indicated
|
15,991
|
1.99
|
1,022
|
Inferred
|
10,637
|
1.99
|
682
|
1.
|
Mineral Resources
reported are inclusive of those mineral Resources modified to
produce the Ore
reserve estimate
|
Table 2: Higginsville Gold Operations Ore Reserve Statement
(rounded for reporting)
Category
|
Tonnes
(000s)
|
Grade
(g/t)
|
Ounces
(000s)
|
Proven
|
29
|
3.63
|
3
|
Probable
|
5,916
|
1.91
|
363
|
Total
|
5,945
|
1.92
|
367
|
Conference Call / Webcast
RNC will be hosting a
conference call and webcast today (March 26,
2019) beginning at 10:00 a.m.
(Eastern time).
Live Conference Call and Webcast Access Information:
North American callers please dial: 1-888-231-8191
Local and international callers please dial: 647-427-7450
A live webcast of the call will be available through Cision's
website at: http://cnw.en.mediaroom.com/events
A recording of the conference call will be available for replay
for a one week period beginning at approximately 1:00 p.m. (Eastern Time) on March 26, 2019, and can be accessed as
follows:
North American callers please dial: 1-855-859-2056; Pass Code:
3873824
Local and international callers please dial: 416-849-0833; Pass
Code: 3873824
About RNC Minerals
RNC has a 100% interest in the producing Beta Hunt gold mine
located in Western Australia where
a significant high grade gold discovery - "Father's Day Vein" - was
recently made. RNC is currently completing a 40,000 metre drill
program, the results of which will be incorporated into an updated
NI 43-101 compliant Mineral Resource Estimate and mine plan
targeted for Q2 2019. Beta Hunt gold resource potential is
underpinned by multiple gold shears with gold intersections across
a 4km strike length which remain open in multiple directions
adjacent to an existing 5km ramp network. RNC also has a 28%
interest in a nickel joint venture that owns the Dumont
Nickel-Cobalt Project located in the Abitibi region of Quebec which contains the second largest
nickel reserve and eighth largest cobalt reserve in the world. RNC
owns a 33% interest in Orford Mining Corporation, a mineral
explorer focused on highly prospective and underexplored areas of
Northern Quebec. RNC has a strong
management team and Board with over 100 years of mining experience.
RNC's common shares trade on the TSX under the symbol RNX. RNC
shares also trade on the OTCQX market under the symbol RNKLF.
Cautionary Statement Concerning Forward-Looking
Statements
This news release contains "forward-looking
information" including without limitation statements relating to
the completion of the Purchase Option, production guidance and the
potential of the Beta Hunt Mine and
Dumont Nickel – Cobalt Project.
Forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of RNC to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Factors
that could affect the outcome include, among others: future prices
and the supply of metals; the results of drilling; inability to
raise the money necessary to incur the expenditures required to
retain and advance the properties; environmental liabilities (known
and unknown); general business, economic, competitive, political
and social uncertainties; results of exploration
programs; accidents, labour disputes and other risks of the
mining industry; political instability, terrorism,
insurrection or war; or delays in obtaining governmental approvals,
projected cash operating costs, failure to obtain
regulatory or shareholder approvals. For a more detailed discussion
of such risks and other factors that could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements, refer to RNC's filings with
Canadian securities regulators, including the most recent
Annual Information Form, available on SEDAR at
www.sedar.com.
Although RNC has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
statements, there may be other factors that cause actions,
events or results to differ from those
anticipated, estimated or intended. Forward-looking statements
contained herein are made as of the date of this news release and
RNC disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events
or results or otherwise, except as required by applicable
securities laws.
SOURCE RNC Minerals