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Mungana Goldmines terminates Kagara deal

13th March 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – ASX-listed Mungana Goldmines on Wednesday told shareholders that it had terminated a heads of agreement (HoA) with the administrators of fellow-listed Kagara, after feedback from the Australian Taxation Office (ATO).

During November last year, Mungana Goldmines, its subsidiary Mungana, and Kagara executed an HoA to terminate a gold rights agreement between the two companies, which would also have resulted in Mungana Goldmines repurchasing its shares held by Mungana.

However, Mungana Goldmines reported on Wednesday that it had received a private ruling from the ATO, which did not confirm the full availability of tax losses to offset any tax liability arising from the HoA transaction.

As this was a key condition to the HoA, the three companies have agreed to terminate the HoA.

Kagara’s administrators said on Wednesday that the three companies had agreed to continue to work together to achieve a mutually acceptable outcome in relation to the gold rights agreement and the shares held by Mungana.

Edited by Creamer Media Reporter

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