Vango Mining Ltd (ASX:VAN) has agreed to acquire the remaining equity interest in the Plutonic Dome Gold Project in Western Australia from JV partner Dampier Gold Limited (ASX:DAU).
The Project is located in the gold bearing greenstone belt in central Western Australia which covers 412 sqkm and is an advanced opportunity for Vango to move from explorer to near term producer.
Significantly, the project has established infrastructure in place to fast-track production, with a toll treatment facility available at the nearby Barrick Gold (NYSE:ABX) processing plant.
The Plutonic Dome Gold Project has a JORC resource of 5.5 million tonnes at 3.1g/t gold for 820,000 ounces of contained gold.
The consideration for the transaction is $2.2 million, which is to be paid by Vango on or before 1 June 2016.
Vango is also required to pay up to $4 million, conditional upon the production of up to 300,000 ounces of gold from the project.
Directors of the company and a number of major shareholders will commit $4.5 million towards a total debt facility of $6 million to assist in the funding of mining the Plutonic Dome Project and to pay the purchase price for the remaining equity stake that Dampier Gold has in the Project.
Additionally, Vango is required to pay a royalty of 1% to 4% on the dollar value of each ounce of gold produced from the project, to be determined based on gold prices and capped at $2 million.
In February 2015, Vango had earned a 45% interest in the Plutonic Dome joint venture gold project from Dampier by completing its minimum $3 million sole funding obligation within a 14 month period.
The share price of Vango has increased by more than 400% during the last six months as the funding from directors and major shareholders as well as gaining 100% of the asset renders the Plutonic project an attractive asset.
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