Kagara spin off gold

Kagara Ltd will spin off its gold assets in an IPO in April.

Kagara Ltd has announced that it will spin off its gold assets onto the Australian Stock Exchange in April.

The nickel and zinc miner will close its initial public offer for its gold assets in three months, following a return to profitability in the second quarter of the financial year.

It is spinning off the gold assets at Mungana and Red Dome in the wake of higher metal prices.

The new company will be known as Mungana Goldmines.

Coffey Mining is currently carrying out studies at the site, with it’s report expected to form a large part of the prospectus.

To date the company has identified a total resource of 32 million tonnes of ore at .81 grammes per tonne for Mungana and 40 million tonnes of ore at .79 grammes per tonne for the Red Dome project.

Kagara had originally put the IPO forward for July.

The zinc and nickel miner is expecting further margin improvements in the current quarter on the back of the stronger December quarter due to a “higher metal price environment,” Kagara chairman Kim Robinson said.

Kagara saw first production from its Lounge Lizard nickel mine, and has forecast full scale production at the asset for the 2010/11 financial year.

The company saw a jump in copper production at its Mount Garnet copper plant at 3806 tonnes, up 59% from the previous quarter.

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