Reed set on divesting noncore assets
KALGOORLIE (miningweekly.com) – Gold miner Reed Resources MD Luke Tonkin told delegates at the Diggers and Dealers conference that the company would persist in its divestment of its noncore assets.
In May, ASX-listed Reed unsuccessfully tried to sell its Comet Vale project, after an agreement with fellow-listed Crest Minerals fell through.
The Comet Vale gold project includes the Sand Queen gold mine, which is currently on care and maintenance, and which holds a total resource of 534 000 t, grading 10.8 g/t gold, for 186 000 oz of gold.
The mine was placed on care and maintenance in May 2010, owing to Reed’s inability to negotiate a long-term milling contract.
The project area also includes several shallow prospects with a total resource of 320 000 t, at 2.4 g/t gold, for 24 600 oz of gold, adjacent to the existing infrastructure.
Tonkin said that apart from the Comet Vale asset, Reed was also considering divesting of its Mt Finnerty project, in Western Australia and its gas transmission capacity on the Dampier to Bunbury pipeline.
The Mt Finnerty project is currently being explored for iron-ore and nickel in a joint venture with NYSE-listed Cliffs Natural Resources.
Reed, through its Barrambie Gas subsidiary, is party to a gas transmission agreement with the Dampier to Bunbury Natural Gas Pipeline for the Barrambie project.
Tonkin said that the divestment of the assets could prove to be a valuable source of income for Reed, as the company looked to rationalise its spending.
Last month, Reed announced that it would be deferring Stage 2 and 3 development of its Meekatharra gold operation, in Western Australia, citing the current price environment and the challenging equity markets as its reasons.
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