PYBAR and Exterra Resources to jointly develop Second Fortune gold mine in WAApril 26, 2016
Mine Development, Western Australia, Whole of Mine
PYBAR is pleased to announce that it has signed a Binding Term Sheet with mineral exploration company Exterra Resources for the joint profit share-based underground development of the high grade Second Fortune gold mine within the Linden gold project, 230km northwest of Kalgoorlie in Western Australia.
The agreement gives PYBAR the exclusive right to a defined mining area and the current outlined Main Lode resource. Further economic resources outlined within the mining area can be included in the mine plan subject to agreement between Exterra and PYBAR.
The agreement is for a four year term with mining to commence within six months of receipt of all approvals necessary to commence production.
The proposed transaction is subject to an exclusivity period of four weeks from execution of the Binding Term Sheet within which the parties will negotiate definitive documentation.
Key terms of the Agreement:
- PYBAR will provide all funding to develop the Second Fortune gold mine under a life-of-mine mining services contract based initially on the Main Lode Probable Reserve of 56,300 ounces at 9.7 g/t Au1.
- PYBAR will pay Exterra a Net Profits Interest (NPI) at a rate of 30% until PYBAR has recovered its peak cash drawdown and 55% thereafter.
- PYBAR will advance an initial $250,000 to Exterra as a pre-payment under the NPI no later than three months from commencement, subject to the satisfaction of conditions precedent.
The project is within 25km of PYBAR’s operations at the Red October and Deep South gold mines, which will deliver important logistical benefits to Second Fortune.
About Exterra Resources Limited
Exterra Resources Limited (ASX:EXC) is a gold exploration and development company based in Perth, Western Australia, with a focus on high grade, high margin gold projects with near term production potential to fund the future growth of the Company.
The Company’s projects are all located in the Archaean Yilgarn Craton in WA, a world class gold province which has been a prolific producer of gold since the late 1880’s and includes the Kalgoorlie “Golden Mile” deposit which has produced over 50 million ounces of gold since discovery in 1893.