Kidman Resources' (ASX:KDR) production ramp-up continues at its Burbanks gold project near Coolgardie in Western Australia.
Kidman Resources (ASX:KDR) will soon be the owner of the Mt Holland goldfield in Western Australia after raising $6.5 million at $0.085 each for the purchase indirectly from the administrators of Convergent Minerals.
This has already proved to be a good deal for investors with the Kidman share price at $0.11. The cost of the acquisition was $3.5 million.
The funds will also assist to lift gold production to 30,000 ounces per annum at Kidman's Burbanks gold mine near Coolgardie where production commenced in the September quarter of 2015.
The main Blue Vein deposit at Mt Holland has a resource of 208,000 ounces grading 6.7g/t gold and was modelled in a study to generate free cashflow of $23 million based on a A$1400/oz gold price and production of 43,000 ounces over an initial three-year period.
That resource is likely to grow based on the planned drill program at Blue Vein where the orebody is open at depth where the previous deepest intercept was just 14 metres.
Regional targets should also provide significant blue sky to lift resource ounces.
Mt Holland has a total combined resource of 928,000 ounces from multiple deposits.
Based on a purchase price for Mt Holland goldfield of A$3.5 million, this equates to A$3.77 per resource ounce, representing a bargain basement price paid.
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