Laverton enters Sumatra

Laverton enters Sumatra

PERTH (Reuters): Laverton Gold NL said yesterday it has reached a memorandum of understanding giving Weston Investments Ltd a 50 percent interest in its Rawas gold mine in South Sumatra, Indonesia.

Weston is a subsidiary of Consolidated African Mines Ltd of South Africa.

Laverton said the agreement would require approval from shareholders and the South African Reserve Bank.

The Rawas mine currently produces about 100,000 ounces of gold a year.

Under the terms of the agreement, Weston would pay A$13.8 million for 50 percent of the issued shares in the three companies that hold contracts at Rawas, Laverton said.

"These funds will be provided as a debt to equity exchange against accommodation provided to Laverton," it said.

Weston had also agreed to subscribe A$125 million to exploration at Rawas over the next three years, Laverton said.