A golden deal

Tasman Goldfields and AusCan to develop Challenger and Mt Adrah gold projects in New South Wales.

A joint venture between Tasman Goldfields and AusCan to develop Tasman’s Challenger and Mt Adrah gold projects in New South Wales shows the strength of Australia’s gold market, Tasman managing director Geoffrey Checketts told MINING DAILY.

The $25 million deal is also an indication of further deals to come, Checketts said.

“Assuming gold stays strong, I think we will certainly see a sustained frequency of deals coming through the markets on gold projects,” he said.

The deal comes weeks after Catalpa Resources and Lion Selection agreed to join and create a mid-tier gold producer, and as Avoca Resources aggressively tries to finalise a takeover bid for Dioro Exploration.

Tasman will raise $200,000 by issuing 2.5 million shares at 8 cents each to the private company AusCan.

The gold company will also grant AusCan an option to enter a development joint venture to bring the Challenger gold project into production.

Tasman plans to bring Challenger into production within the next 12 months with an initial life of three years, with production targets of around 32,000 ounces per year.

The deal represents a very positive financial outcome, Checketts said.

“This is a good deal for Tasman,” he said.

“It potentially converts our resources and reserves that we have had on the balance sheet since we listed into cash.

“The cash profile could be such that we could be sitting in a nice cash flow position within the next 12 months.”

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