+++++++++++++++++++++++++ 1) KALGOORLIE ACQUISITION AND JOINT VENTURE
Synergy Metals Ltd is pleased to announce that its 100% owned subsidiary, Synergy Exploration NL, has acquired a 51% interest in two unique gold projects located at Kalgoorlie, Western Australia. Shareholder approval will be sought for the transactions, which are described in further detail below.
Synergy Exploration NL ("Synergy") has entered into a joint venture agreement with Cossack Resources Pty Ltd ("Cossack") and its nominees whereby Synergy acquired 51% of the West Kalgoorlie and Seven Mile Hill projects.
WEST KALGOORLIE
The West Kalgoorlie project comprises 1647 hectares and is located on the western edge of the City of Kalgoorlie/Boulder in the gold rich province of the Eastern Goldfields, one of the world's major gold mining centres. The project consists of 12 tenements numbered from P26/3151 to 3162 inclusive, and encompasses a number of gold mines previously worked during the early 1900's. The mining tenure adjoins the giant North American gold producer Barrick Gold's Super Pit operations and the highly prospective mining tenements of Australian producer Croesus Mining NL.
SEVEN MILE HILL
The Seven Mile Hill project is situated on P15/4547, some 14km west of Kalgoorlie and adjoins Croesus Mining's current mining operations at Binduli. This tenement has an area of 155 hectares and abuts the Rand Mining NL and Tribune Resources NL's Seven Mile Hill Joint Venture which has reported that it has identified 16 targets by regional aeromagnetic survey flown over this region.
STRATEGIC HOLDING
The West Kalgoorlie and the Seven Mile Hill projects give Synergy a strategic holding in the centre of the gold rich mineralisation area in Kalgoorlie, Australia's most outstanding gold mining location and an area that has provided exploration success for numerous major and junior mining companies.
ACQUISITION COSTS
Subject to shareholder approval, Synergy will pay the following acquisition costs to Cossack to acquire the initial 51% interest in the tenements: a cash payment of $50,000 and the issue of 50 million options in Synergy Metals Ltd within three months of shareholder approval; or if the issue of options is not approved by shareholders, an additional cash payment of $100,000.
FIRST RIGHT OVER REMAINING 49%
The payments described above will also give Synergy the first right to purchase the remaining 49% of the interests in the mining tenements. Synergy's first right to purchase the remainder of the project will be for $1.4m in either cash or shares to be agreed by Cossack. Included in the agreement, Synergy also has the first right to purchase Cossack's royalty of $2.50 per tonne of ore mined.
Synergy will be obtaining all historical and closed/open file data from the Department of Mineral and Petroleum Resources to assess previous exploration reports and to further enhance new interpretations for future exploration. Synergy and Cossack will seek shareholder approval to the transactions, and will comply with all requirements of ASX, ASIC, and any other relevant regulatory authority.
2) DALTONS PROJECT
On 29 July 2002, the company announced that it intended acquiring the Daltons Project, subject to shareholder approval. On 25 October 2002, the company issued a notice of meeting for a shareholders' meeting to be held on 27 November 2002, which inter alia, included a resolution for shareholders to vote on the proposed acquisition of the Daltons Project.
As a consequence of today's announcement in relation to the West Kalgoorlie and Seven Mile Hill tenements, the directors have decided not to proceed with the acquisition of the Daltons Project, and accordingly have withdrawn that resolution from the shareholders' meeting to be held on 27 November 2002.
All other resolutions included in the notice of meeting will be voted on at the shareholders' meeting.
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