Phoenix Gold (ASX:PXG) will use funds raised from the current share purchase plan (SPP) and the recent A$5 million oversubscribed placement to complete the purchase of the St Ives heap leach processing facility.
The SPP will close on Tuesday 3rd March 2015. Shares are priced at A$0.10, which is the same price as the placement.
The heap leach facility is a key part of Phoenix's development strategy, enabling the treatment of stockpiled lower grade ore mined from Castle Hill and surrounding projects.
The facility will be relocated to the wholly-owned Castle Hill, which has the potential to become a multi-million ounce gold mine.
In July 2014, the company had agreed to acquire the 2.3 million tonne per annum St Ives heap leach processing plant located near Kambalda, 70 kilometres south of Kalgoorlie from St Ives Gold Mines Pty Ltd for $2 million.
The heap leach processing plant consists of a 3 stage crushing plant, agglomeration drum, overland conveyors and stacking equipment, full gold recovery circuit and all associated infrastructure and spare parts.
The plant will enable treatment of stockpiled lower grade ore mined from Castle Hill.
Current Indicated and Inferred heap leach resources for Castle Hill and its surrounding projects stands at 58.34 million tonnes at 0.6 grams per tonne for 1.1 million ounces of gold.
Como Engineering have been commissioned to deliver a detailed engineering study to bankable level for the relocation, refurbishment and re-commissioning of the processing plant.
Worley Parsons have been commissioned to redesign the heap leach pads to integrate with the plant.
Phoenix Gold's acquisition of the heap leach plant from St Ives Gold will provide additional cashflow by giving the company a development pathway for lower grade ore from the Castle Hill project.
This will complement the milling of higher grade material from the Kintore Pit through FMR Investments' Greenfields mill as well as the development of the flagship Mick Adams/Kiora and Wadi open pits with Norton Gold Fields (ASX:NGF).
The updated heap leach feasibility study integrating the plant into the leach pad is on track for delivery in the March quarter 2015.
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