Meekatharra buys RI project

Meekatharra buys RI project

SYDNEY (Reuter): Meekatharra Minerals Ltd. said it has agreed to buy out the 52 percent stake held by its partner, Aurora Gold Ltd., in Indonesian gold mining firm Natarang Offshore Pty. Ltd.

Natarang owns 85 percent of a mining contract covering 810 square kilometers in South Sumatra. The contract includes the Way Linggo North Vein gold and silver project.

"The consideration for the acquisition is to be a net smelter royalty of 1.85 percent to a maximum level of US$3.5 million," Meekatharra said in a statement.

"An advance of US$250,000 against net smelter royalty payments will be made initially and a further advance of US$250,000 will be made on completion of a bankable feasibility on the Way Linggo North Vein," Meekatharra said.

The feasibility study is expected to be finished by December this year. In November Meekatharra said that a pre-feasibility study of the project found there was a drilled resource of 156,700 ounces of gold and 2.03 million ounces of silver.

Initial production of 40,000 to 60,000 ounces of gold was targeted, it said then.