Queensland Mining unveils plan to capitalise on gold recovery

JOHANNESBURG (miningweekly.com) – ASX-listed junior Queensland Mining has set in motion a plan to divest of its noncore gold assets to capitalise on the recovering gold markets, while narrowing its focus to developing the White Range copper/gold project near Cloncurry.

Queensland Mining announced on Tuesday that it had entered into an option agreement with Australian company Ausmex Mining to form a joint venture (JV) over the Gilded Rose, Mt Freda and Evening Star projects, also near Cloncurry.

In terms of a staged programme and the JV, in which Queensland Mining will hold 40%, Ausmex plans to list the assets on a stock exchange and also intends to raise capital to fund the development of the assets into a production operation in the near future.

Gilded Rose and Mt Freda have total resources of about 108 400 oz of gold and Queensland Mining said that it believed these assets could be converted into a cash flow operation in a short period of time. Gilded Rose also has a mothballed facility on site with plant and machinery.

Ausmex will fund 100% of the holding, development, production and exploration costs associated with the JV during the option period and the JV period. The company will also make staged payments to Queensland Mining, including a $20 000 option fee for the first three month option period, which can be extended for another three months by paying a further $80 000. The option period can be extended for another three months for $50 000.

Queensland Mining said listed shares would have a face value of $1-million to exercise the option within the option period.

Queensland Mining will also receive $1-million in cash upon the production of 1 000 oz of gold, which will lower its interest in the JV to 20% and another $1-million in cash when production reaches 5 000 oz, at which stage Ausmex will own 100% of the assets.