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EganStreet Resources Ltd

EganStreet Resources boosts gold reserves at Rothsay project by 18%

The new reserve of 235,000 ounces builds on the updated definitive feasibility study for the project.

Drilling at Rothsay project
The company has recommended acceptance of a takeover bid from Silver Lake Resources

EganStreet Resources Ltd (ASX:EGA) has increased the ore reserve by 18% to 235,000 ounces at Rothsay Gold Project in Western Australia’s Midwest.

This new reserve for the project 300 kilometres northeast of Perth is based on the updated resource estimate and builds on the definitive feasibility study (DFS) and subsequent updated DFS.

Rothsay hosts high-grade mineral resources of 454,000 ounces at an average grade of 9.2 g/t gold, which includes 949,000 indicated tonnes at 9.6 g/t and 590,000 inferred tonnes at 8.6 g/t.

New information from technical studies

The updated reserve estimate incorporates new information gained from additional technical studies completed until July 2019, including:

  • The November 2018 mineral resource estimate;
  • Cost estimates outlined in the updated DFS;
  • Additional geotechnical modelling based on drill holes completed up until November 2018; and
  • An updated mine plan targeting shorter pre-production period and lower pre-production capital, inclusive of working capital.

This plan includes boxcut and access to the southern end of the ore body; increased sub-level interval; increased decline turning radius; and earlier establishment of primary ventilation and escapeway via shorter raises.

READ: EganStreet Resources recommends acceptance of takeover offer

This week EganStreet directors recommended that shareholders accept a takeover offer from Silver Lake Resources Limited (ASX:SLR), which has the Deflector mine and processing hub near Rothsay.

The offer from values EganStreet at 40 cents per share, which implies a $522 million total transaction enterprise value.

A Bid Implementation Deed (BID) between the parties will see Silver Lake acquire all issued and outstanding ordinary shares of EganStreet.

Each EganStreet shareholder will receive 0.27 Silver Lake shares for every EganStreet share held.

If it proceeds, the acquisition will provide a near-term development opportunity to introduce a new high-grade ore source to an upgraded Deflector processing facility.

READ: EganStreet Resources receives approval for mining proposal and mine closure plan for Rothsay Gold Project

EganStreet recently received approvals for the mining proposal and mine closure plan for Rothsay.

These approvals are for the project’s two mining leases and miscellaneous licence, covering the planned mining, processing, waste facilities and haul roads.

Quick facts: EganStreet Resources Ltd

Price: $0.28

Market: ASX
Market Cap: $38.54 m
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