White Dam Gold restructure

Exco and Polymetals Group have agreed on the final structure of the Joint Venture Agreement envisaged by the Heads of Agreement (HOA) entered into on 27 March 2008 in relation to the White Dam Gold Project.

Exco and Polymetals Group have agreed on the final structure of the Joint Venture Agreement envisaged by the Heads of Agreement (HOA) entered into on 27 March 2008 in relation to the White Dam Gold Project.

The White Dam Gold Project, located about 80 km west of Broken Hill, is an advanced development project containing a resource inventory of 330,400 ounces of gold.

Subject to final approvals being obtained, the parties anticipate that the project can commence construction in mid-2009, with first gold production scheduled by late 2009/early 2010.

Polymetals will acquire a 25% interest in the project for a consideration of $2.8m.

The consideration will be settled by the recognition by Exco of $1m of expenditure on the project by Polymetals since the date of the HOA, and a payment of $1.8m in cash upon the signing of the Joint Venture Agreement documentation.

Exco and Polymetals will also enter into a management agreement, appointing Polymetals as project manager.

Polymetals is a privately owned company specialising in the development of remote small to medium size resource projects.

According to a statement from Exco, finalisation of the Joint Venture arrangements will allow the partners to move forward on financing and prompt implementation of the project to take advantage of the currently favourable gold price environment.

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