A meeting of Kimberley Metals’ shareholders has approved a placement and farm-in arrangement with Henan Yuguang Gold and Lead Co (HYGL).
The placement has raised Aus$5.06 million and leaves HYGL with a 15% stake in Kimberley. The Aus$5 million farm-in makes HYGL a 25% joint venture partner in Kimberley’s Sorby Hills Silver-Lead Project at Kununurra in northern Western Australia.
The agreement is the result of a trip to China last year by Kimberley’s executive chairman Jim Walls to visit HYGL under the guidance and support of The Penfolds Group followed by a due diligence visit by HYGL officials to Kimberley’s Sorby Hills and Mineral Hill projects in March this year.
HYGL president and chairman Yang Anguo also visited Australia to attend the recent special meeting of shareholders as well as to inspect the two projects.
At Mineral Hill in western New South Wales a 1500 metre drilling program is due to start at the Pearse and Pearse North prospects in early September.
This will follow up the two programs that the company has carried out to further progress the Pearse project. This work has established measured and indicated resources at Pearse and has outlined further potential for a mine at Pearse North.
Preliminary metallurgical test work has demonstrated that a substantial proportion of gold end silver can be recovered by CIL and flotation for the oxide, transition and primary ores.
Work has started on recommissioning the existing CIL and flotation plant to bring it back into operation. This plant was mothballed in 2005 and has since been on care and maintenance.
The development approval process for the Pearse open cut is well advanced and Kimberley has scheduled gold production start up for the middle of 2011.
The Sorby Hills joint venture was scheduled to begin a detailed 10,300 metre infill drilling program at the end of August as part of the necessary work for completing a feasibility study.www.kimberleymetals.com.au
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