The Cannon gold mine operations committee resolved to pay $2 million in profit distributions, or $1 million to Southern Gold as its 50% profit share.
Westgold Resources (ASX:WGX) is financing and developing the deposit under a 50/50 profit share arrangement with Southern Gold.
The companies are processing the ore at the South Kalgoorlie Operations Jubilee plant, 35 kilometres to the southwest of Cannon.
The latest payment has taken the total payments to Southern Gold from Cannon since December 2016 to $11.5 million.
Southern Gold has fully repaid all of its debt and this latest $1 million distribution is fully banked, taking the company’s unaudited cash position to circa $5.3 million.
The company has significant accumulated tax losses it can use to offset any profits, so no tax is expected to be payable on these distributions.
The ninth and final processing campaign of Cannon ore was completed on 30 June 2017 and the results of this campaign will be reported shortly.
The final cash distribution from the Cannon open pit operations is expected in August.
Meanwhile, Southern Gold is commencing a 2,170-metre reverse circulation drill program at the Cannon gold mine.
This is to define and extend the high grade gold zones below the base of the pit to support future underground mine design.
Southern Gold anticipates a new resource estimate below the open pit will be prepared once all gold assays from this program are received.