Photo by: Bloombeg
PERTH (miningweekly.com) – ASX-listed Southern Gold has completed the divestment of its Cambodian subsidiary Southern Gold Asia, allowing the company to focus its efforts on its Cannon gold mine, in Western Australia.
In June of last year, Southern Gold entered into a restructuring agreement with its unlisted joint venture (JV) partner Mekong Minerals, allowing for the transfer of Southern Gold Asia in exchange for a free carried interest and royalty.
Southern Gold said on Tuesday that all shares in the subsidiary have now been transferred to Mekong.
Post the completion of the transaction, Southern Gold would retain a 15% free carried interest in the JV, until the completion of a positive definitive feasibility study, and would retain a 2% gross sales royalty.
The 2% gross sales royalty would apply until a cumulative $11-million has been earned, at which point it would reduce to a 1% royalty.
“Our Cambodian tenements were noncore assets receiving little attention or value from our investors. In Mekong hands, they should move forward and represent interesting exploration plays,” said Southern Gold MD Simon Mitchell.
“We look forward to seeing them relaunch exploration activity over the coming year.”
Mitchell said that following the transaction, Southern Gold would retain excellent exposure to discovery in Cambodia, but would continue to concentrate on its Cannon project, where first gold was poured.
The company’s focus would also be on finding and exploiting other gold projects in the Kalgoorlie region.