Reed's Comet sale falls through
PERTH (miningweekly.com) – Gold miner Reed Resources on Friday told shareholders that the sale of its Comet Vale project would no longer be sold to fellow-listed Crest Minerals, after that company failed to secure funding.
In March this year, Crest signed a purchase agreement with Reed Resources to acquire Sand Queen Gold Mines, which holds the Comet Vale gold project, for A$6-million in cash.
However, Crest said this week that it had been unable to secure the required funding, terminating the agreement with Reed.
“Comet Vale remains an attractive noncore asset and Reed will resume discussions with other interested parties to realise value for its shareholders from this high-grade resource, as Reed continues to focus on delivering solid cash flow from its Meekatharra gold operation,” said Reed MD Luke Tonkin.
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.
Crest said this week that while it was disappointed that the acquisition could not be completed, the company had been active in developing its flagship Majestic North gold project, with a 50 drill-hole programme completed in early May.
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