Kingsgate Consolidated Limited (KCN) announces that it has entered into an agreement to purchase the Bowdens silver project in New South Wales (N.S.W.), Australia from a wholly-owned subsidiary of Silver Standard Resources Inc., subject to the satisfaction of certain conditions precedent.
Bowdens, located some 240km west of Sydney, is an epithermal silver deposit with an existing NI 43-101 resource (Measured and Indicated) of 79.5Moz of silver, and an additional inferred resource of 17.6Moz, using a 40 g/t silver equivalent cut-off grade. The deposit contains significant by-product credits totalling an additional 27.4Moz (Measured & Indicated silver equivalent) and 5.9Moz (Inferred silver equivalent). Kingsgate’s development team plans to fast-track the project through a Bankable Feasibility Study. Based on Kingsgate’s initial review, Bowdens could be in production by early 2014.
Bowdens has the potential to be a robust project with the possibility of increasing the resource base. Kingsgate plans to release a JORC-compliant resource and the conclusions of an updated scoping study within the next 2 months. Bowdens has become a non-core asset for Silver Standard as it concentrates on developing silver projects in both South and North America.
Consideration for the acquisition is A$75M comprising A$35m cash, payable upon closing; two payments, each of A$5m cash, payable on 31/12/2011 and 30/06/2012; and $30m in Kingsgate shares.
Kingsgate’s Managing Director and CEO Gavin Thomas said, “This exciting opportunity enables Kingsgate to acquire an advanced development project with exploration and development upside. Bowdens is ideally suited to the company’s core strengths of identifying quality projects and bringing them into production cost effectively”.
Bowdens represents a continuation of Kingsgate’s previously stated growth strategy and is consistent with recent initiatives including the acquisition of a 70% interest in Laguna Resources NL, which wholly owns the Arqueros/Esperanza silver gold project in Chile. Bowdens meets Kingsgate’s key objectives of using the company’s technical expertise to acquire and develop advanced exploration projects.