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Southern Gold starts reaping rewards from Cannon gold mine

Southern Gold (ASX:SAU) has received its $2 million share of the first profit-share distribution from the Cannon gold mine operations in Western Australia.
Southern Gold starts reaping rewards from Cannon gold mine
Southern Gold has received $2 million.

Southern Gold owns the Bulong Gold Project located 30 kilometres east of Kalgoorlie, which hosts the Cannon Gold Mine, projected to produce around 50,000 ounces gold.

Westgold Resources (ASX:WGX) is financing and developing the deposit under a 50/50 profit share arrangement with Southern Gold.

Westgold is managing operations at the Cannon gold mine and processing Cannon ore at the South Kalgoorlie Operations Jubilee plant, 35 kilometres to the southwest of Cannon.

The Cannon gold mine operations committee paid $4 million in distributions, or $2 million to each of Westgold Resources and Southern Gold.

Southern Gold has applied $1.5 million of the $2 million distribution to the repayment of the working capital facility provided by Westgold.

The balance of the Westgold loan is circa $1.2 million and it is anticipated that this will be paid back in full on receipt of the next distribution.

The remainder of the maiden distribution, or $0.5 million, has been received as cash.

Southern Gold’s shares were last trading at $0.31 on Wednesday, up 8.77% intraday.
Cash flow from the Cannon gold mine has been many years in the making, with the company now in the most rewarding phase of the operation.

High grade ore is being mined and the processing is continuing to pour gold with several profit share payments expected over the coming months.

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