But did you see this consolidation coming? Isn't it great what comes a higher currency(higher priced gold)? btw OK, we know one who sold into the rally - & what they did with with money:
Wednesday May 30, 6:02 pm Eastern Time
Press Release
SOURCE: Homestake Mining Company
Homestake Agrees to Acquire Cowal Gold Project in New South Wales, Australia
WALNUT CREEK, Calif., May 30 /PRNewswire/ -- (Note: All financial information is reported in US dollars unless stated otherwise)
Homestake Mining Company (NYSE: HM; Australia: HSM; Toronto: HCX) announced today that it reached an agreement with North Gold (WA) Ltd, a subsidiary of Rio Tinto Limited, to purchase a 100% interest in the Cowal Gold Project located in central New South Wales, approximately 250 miles (400 kilometers) west of Sydney. According to the feasibility study conducted by North, the Cowal project hosts a recoverable reserve of 73.0 million tons (66.4 million tonnes) of ore grading 0.035 ounces of gold per ton (1.18 grams per tonne) or approximately 2.5 million ounces of gold. This reserve is contained within mineralized material totaling 100 million tons (90.3 million tonnes) grading 0.044 ounces per ton (1.5 grams per tonne). Many of the holes defining the resource bottomed in economic grade mineralization indicating considerable potential to enhance the original North model. Homestake expects to complete re-examination of parameters of this project as quickly as possible. The Cowal Project is located within the acquired land package covering approximately 153,000 acres (620 square kilometers) of highly prospective Lachlan Fold Belt volcanics, which are also host to the large Cadia/Ridgeway copper/gold mines and numerous smaller gold mines in central New South Wales.
(Photo: newscom.com newscom.com
North's feasibility study envisaged development of an open pit designed to mine and treat approximately 6.6 million tons (6.0 million tonnes) of ore per year. The deposit was found to be amenable to high volume, low-cost mining and milling methods. The planned treatment facility included a conventional carbon-in-leach (CIL) plant and a separate sulfide flotation unit capable of economically producing approximately 200,000 ounces of gold per year for over 10 years. Upon the acquisition of North in late 2000, Rio Tinto concluded that Cowal did not fit its corporate goals and decided that a gold mining company such as Homestake would be better equipped to realize a greater value from this emerging project.
Homestake paid a deposit of $375,000 and will pay $9.625 million upon completion of the Agreement, which is subject to the parties receiving certain government approvals. Homestake will also pay $2.65 million on the fourth anniversary of completion of the Agreement and will make a further payment of $15 million if it decides to develop a mine.
``The acquisition of the Cowal project represents an excellent opportunity for Homestake to expand its gold reserves and future production on a per-share basis without compromising the Company's financial strength and its geo-political risk profile,'' said Jack E. Thompson, Homestake's Chairman and Chief Executive Officer. ``We are gratified by the fact that Homestake was able to leverage its position as Australia's second largest gold producer into a 100% interest in this highly prospective development project. We plan to capitalize on our technical strengths and proven track record of superior environmental management and community relations to turn Cowal into a prolific gold producer.''
Following completion of this acquisition, Homestake will conduct a detailed geological evaluation and carry out requisite engineering studies to determine the optimum parameters for a timely development of this project. Concurrently, Homestake will work towards securing all necessary approvals including those related to the Development Consent granted by the Government of New South Wales in 1999, to advance the project on the basis of sound environmental practice and financial return consistent with the current economic environment.
Homestake Mining Company is an international gold mining company with operations and exploration activities in the United States, Canada, Australia and Chile. The Company also has active development and exploration programs in Argentina. Shares of the Company's common stock are listed on the New York Stock Exchange, the Australian Stock Exchange and the SWX Swiss Exchange. Homestake Canada Inc. exchangeable shares are listed on the Toronto Stock Exchange. Homestake began gold mining operations over 120 years ago, and is one of the oldest listed companies on the New York Stock Exchange still in its original business. It has received numerous industry awards for its responsible environmental health and safety management programs. For additional corporate information, please visit Homestake Mining Company on the Internet at homestake.com .
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT. This release contains forward-looking statements that are based on management's expectations and assumptions. They include statements preceded by the words ``believe,'' ``estimate,'' ``expect,'' ``intend,'' ``will,'' and similar expressions; estimates of future production; cost estimates; and other estimates of future results or activity. Such statements are ``forward looking statements'' that involve risks and uncertainties that could cause actual results to differ materially from estimated results. Among the important factors that could cause actual results to differ materially are the following. Production may vary from estimates for particular properties and for the Company as a whole because of changes in reserves, variation in ore mined from estimated grade and metallurgical characteristics, unexpected ground conditions, mining dilution, labor actions, and government restrictions. Cash costs may vary due to changes from reserve and production estimates, unexpected mining conditions, and changes in estimated costs of equipment, supplies, utilities, labor costs and exchange rates. Capital cost estimates are based on operating experience, reserve estimates and expected production rates, estimates by and contract terms with third party suppliers, expected legal requirements, feasibility reports and other factors. Factors involved in estimated time for completion of projects include the Company's experience in completing capital projects, estimates by and contract terms with contractors, engineers, suppliers and others involved in design and construction of projects, and estimated time for the government to process applications, issue permits and take other actions. Changes in any factor may cause costs and time for completion to vary significantly from estimates. There is a greater likelihood of variation for properties and facilities not yet in production due to lack of actual experience.
SOURCE: Homestake Mining Company
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