Placer Dome eyes RI project

Placer Dome eyes RI project

SYDNEY (Dow Jones): Masmindo Mining Corp, an Australian gold exploration company said Tuesday that it has reached a preliminary agreement for Canada's Placer Dome Inc (PDG) to incrementally acquire up to 75 percent of its Awak Mas gold project in Sulawesi, Indonesia.

Masmindo, formerly known as Lone Star Exploration NL, is 77 percent owned by South Africa's JCI Ltd.

The Australian company and Placer's unit, Placer Exploration Ltd, plan to jointly explore and ultimately develop Awak Mas, Masmindo said in a statement.

Under the agreement, which has yet to be formalized, Placer Dome will spend US$1.0 million at Awak Mas and assume the costs of running the site and support staff in Jarkarta.

It must then spend a further $10 million on the project if it wishes to earn a 51 percent stake in Awak Mas. Placer can lift this stake to 75 percent by spending an additional $10 million taking the project through to a feasibility study.

The remaining 25 percent would rest with Masmindo and the project partners would then contribute funds to the project in proportion to their respective stakes.