Kagara Limited announced that it will proceed to complete the proposed acquisition of Einasleigh Copper Project in North Queensland from Copper Strike Limited after the transaction was approved by Copper Strike shareholders last week.
The acquisition of the Einasleigh Project represents an important milestone for Kagara substantially increasing the copper and polymetallic resource base at its Central Mt Garnet province in North Queensland.
Kagara has entered into a definitive agreement to purchase the Einasleigh Project for total consideration comprising USD 16 million in cash and the cancellation of Kagara's 17.5% shareholding in CSE. Settlement of the acquisition is scheduled to occur by December 16th 2011.
The Einasleigh Copper Project which comprises a tenement package covering a total area of approximately 450 square kilometers located 350 kilometers North West of Townsville, lies immediately to the South West of Kagara's Mt Garnet copper and polymetallic processing facilities and to the north west of its Thalanga polymetallic processing facility. The Project comprises Measured, Indicated and Inferred resources of 15 million tonnes 0.84% copper at Kaiser Bill and 1.1 million tonnes at 2.9% copper at Einasleigh containing 158,000 tonnes of copper.
Mr Geoff Day MD of Kagara said that "This represents a significant addition to our central Mt Garnet resourcs base. With a high grade resource containing around 32,000 tonnes of copper metal at Einasleigh, this supports our 5 year plan objective of growing the resource base to sustain 30 kilo tonne per annum copper production within the next 3 to 5 years."
He said that however, there is also the much larger but lower grade Kaiser Bill resource containing 126,000 tonnes of copper metal which represents a very interesting longer term exploration and development opportunity. Kagara will look closely at the geological environment at Kaiser Bill to see if potential exists for a high grade core to the deposit. In addition, as outlined in our 5 year growth strategy, the potential to upgrade resources through ore sorting or similar beneficiation techniques is being reviewed by Kagara. The Kaiser Bill deposit is an obvious candidate for this evaluation.
He added that the addition of the Einasleigh assets compliments our already strong growth portfolio of copper projects throughout our central Mt Garnet province which include Balcooma, Maitland and our strategic alliance with Monto Mineral covering the Baal Gammon tenements. In addition to the copper deposits, Einasleigh also hosts four lead zinc deposits containing over 250,000t of zinc which will be the focus of extensional and exploration drilling in the coming 18 months1. The company plans a thorough evaluation of work done to date within the 450 square kilometers tenement package to highlight areas for further investigation.
