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Wits Gold gets approval to buy Burnstone

11th July 2013

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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JOHANNESBURG (miningweekly.com) – JSE-listed Witwatersrand Consolidated Gold Resources (Wits Gold) on Thursday said it had received approval to buy the struggling Burnstone mine, in Mpumalanga.

The company said in a statement that the required number of Southgold creditors voted in favour of Wits Gold’s proposed business plan for the embattled Great Basin Gold’s (GBG’s) suspended Burnstone gold operation.

The plan incorporated Wits Gold’s proposed offer to acquire the sale shares in and sale claims against Southgold.

Wits Gold said it would now progress towards the finalisation of definitive transaction agreements.

Wits Gold would pay $7.25-million in cash towards GBG’s South African subsidiary Southgold Exploration’s debt, which was restructured and cut by 55% to $177.35-million.

Southgold would, from generated actual cash flow, repay the remaining $170.1-million liability.

Wits Gold would also advance a $100-million shareholder loan with an interest rate of 4%, which was also to be paid back on a preferential basis from Southgold’s operating cash flow.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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