Gold producer and explorer Greater Bendigo Gold Mines Ltd
(ASX:GBM) says is has signed an option to purchase the Bendigo Creek Tailings Project.
The company says, if the option is exercised, it will pay $200,000 plus five million of its shares for the project. It would also have an obligation to pay a 7.5% royalty on gold sales.
The gold miner says the project contains a drill indicated tailings resource of 1.8 million tonnes at an average 0.58 grams a tonne, giving a gold resource of around 33,000 ounces.
Greater Bendigo Gold Mines says at today’s gold price of approximately $1,500 per ounce this represents a gross gold value of around $50 million.
The option agreement requires the company to spend management time on progressing the project and to fund various assessments and approval processes.
The gold miner says once the outcomes of the assessment and approval processes are determined, it will be in a position to make an informed decision on exercising its option.
Greater Bendigo Gold Mines booked a loss for the 2009 financial year, following losses the two years previous.
