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Austral Gold takes stake in Canada's Argentex

26th March 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Australia’s Austral Gold has moved to acquire a 19.9% stake in Canada-listed Argentex Mining, which is developing the 23.6-million-ounce Pinguino silver/gold project, in Argentina.

Argentex has issued more than 17.3-million new ordinary shares to Austral Gold at a total price of C$5-million.

Once the transaction has been completed, Austral Gold would be Argentex’s largest shareholder, and would have the right to nominate one director to the company’s board, and a member to its technical advisory board.

“This is a significant transaction for Austral Gold, and it is in line with our strategy of creating a leading South Amercian-focused resource company,” said Austral’s nonexecutive chairperson Eduardo Elsztain.

“For some time, we have been assessing opportunities in South America and we believe Argentex represents an excellent investment.”

Argentex has told shareholders that a portion of the funds raised through the Austral Gold investment would be used to further develop the Pinguino project, which covers some 10 000 ha in the Santa Cuz province of Argentina.

Both Austral Gold and Argentex have agreed to actively consider a possible business combination, which could include a merger, exchange of shares or another form of business combination, which would be in the interest of both companies’ shareholders.

Edited by Creamer Media Reporter

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