Thursday 13th October 2011 1 Comment
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Gold miners OceanaGold and MOD Resources are getting into bed to see whether the Sams Creek gold prospect in Nelson is viable.
Australia’s MOD Resources will earn up to 80 percent of the earnings from New Zealand’s biggest undeveloped gold deposit by funding the staged exploration programmes, the first part of which has a A$1.9 million price tag. OceanaGold holds the permit for gold exploration in the area.
Subject to targets being met, OceanaGold will receive between 10 million and 17 million shares in MOD Resources at no cost, worth between A$1.6 million and A$2.7 million based on the Oct. 10 closing price.
“I have always believed that Sams Creek had the potential to host a very significant gold deposit,” MOD Resources chairman Miles Kennedy said in a statement. “There is obvious scope for an increase in the resource, both within the main zone prospect where the existing 770,000 ounce resource has been defined and the various other targets along the 6 kilometre of strike.”
Sams Creek is the second project for the ASX-listed MOD Resources, which counts James Packer among its investors, the first being a copper project in Botswana.
OceanaGold managing director Mick Wilkes said the deal “is consistent with our strategy to unlock value within our current tenement holdings, and to maintain our exploration focus on the two most significant gold districts in the South Island, Macraes and Reefton.”
Shares in triple-listed OceanaGold were unchanged at $3.25 on the NZX, and have shed about 33% this year, while trading in MOD Resource’s stock was still halted on the ASX.
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