VENTURES: Constantia Gold Miner Snags It Rich
Recent Western Cape Business News
IT may be headquartered more than a thousand miles away from the Reef, but Constantia-based junior mining company White Water Resources (WWR) has pulled off a deal that secures some promising gold assets.
Last month WWR – via a special purpose vehicle called Cubigraph – bought prospecting and mining rights from DRD Gold subsidiary, East Rand Proprietary Mines (ERPM).
These are not ‘working’ assets – but the rights cover the area adjacent to the old (and well known) ERPM mine on the East Rand. Mining in the ERPM complex has long been discontinued because of rising underground water.
But WWR reckons the ERPM extensions contain viable gold resources, which – importantly for the further development of the company - provides a classified gold resource.
The areas covered by the rights have gold resources that comply with the requirements of the South African Mineral Resource Committee (SAMREC) Code. These total 18 million ounces – which could be useful should the rand gold price shift up sharply.
But the ounces are found between 2 500 meters to 3 000 meters below surface – which means this will be a capital-intensive deep level mining opportunity.
The deal also brings an empowerment partner onboard. The agreement sees WWR buying 74 % of ERPM’s mining and prospecting rights with the balance of the shares remaining in the hands of an existing empowerment partners (Khumo Gold and the DRDSA Empowerment Trust).
WWR will pay R18.5 million for the ERPM assets, a deal that will be settled by the issuing of new WWR shares. This means DRD Gold – which is one of the bigger second line mining companies in the world - will become a significant shareholder in WWR.
CBN suspects the ERPM transaction may just be the beginning of a series of deals that could bundle more gold assets into WWR.
Significantly the company is currently trading under a cautionary notice that warns shareholders that negotiations are in progress.
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