CBH cashed up after $12m Hera sale
Wednesday June 24, 2009
Endeavor Mine, near Cobar, will receive a cash injection from the sale of the Hera tenement by CBH Resources. ▪ Photo contributed
The sale last week by CBH Resources of the Hera exploration tenement near Nymagee is expected to have a threefold benefit for the region.
Following the $12million sale agreement, CBH has received a major cash injection to sustain its Endeavor Mine project; production is expected to begin on the Hera project; and the ore from the project could potentially be processed at Endeavor Mine.
Under the agreement, announced last Thursday, Australian Stock Exchange (ASX) listed company YTC Resources has agreed to purchase the Hera tenement and an 80 per cent interest in the adjacent Nymagee mineral tenements.
YTC, which is 25.75 per cent owned by major Chinese producer Yunnan Tin Group, is required to pay a non-refundable deposit of $1million to CBH with the balance of the purchase price to be paid within 90 days subject to approvals from shareholders and the Australian Foreign Investment Review Board.
CBH will continue to earn a five per cent royalty of the value of the first 250,000 ounces of gold doré produced at Hera.
According to a statement to the ASX last week, “YTC’s intention is to develop a gold and base metal mine at Hera, with ore to be trucked to CBH’s Endeavor Mine for processing”.
CBH managing director Stephen Dennis said YTC also “proposes to fund the purchase and construction of a gravity separation circuit at Endeavor designed for the recovery of coarse gold and silver”.
“While the sale of Hera provides CBH with an immediate financial return, the arrangements with YTC will also provide us with considerable upside through the gold royalty and the tolling of Hera ore at Endeavor,” Mr Dennis said.
CBH’s general manager of corporate affairs Kevin Gallagher told The Cobar Weekly on Monday the sale means “the situation is a lot better than a few months ago” for Endeavor.
“At the moment it is running along well, but there are no plans to increase production unless metals prices continue to improve,” he said.
YTC, which is based in Orange, says it believes the Hera project is a “high-grade gold-base metal deposit with the potential to be rapidly advanced to development for modest capital expenditure”.
YTC chief executive officer Rimas Kairaitis said the acquisition is a “fantastic” opportunity for the company.
“YTC have acquired the Hera project...with a view to upgrade the existing mineral resource and rapidly progress the Hera deposit into final feasibility and development.
“The ability to move forward from a base of existing high quality evaluation work completed by both Triako and CBH will allow for YTC to complete these milestones in an abbreviated timeline,” Mr Kairaitis said.
“In addition to the near term production potential, the Hera project offers outstanding exploration potential at depth and along strike from the Hera deposit and at depth below the historic Nymagee copper mine.
Next story | News home
