WPC Resources Inc. (CVE:WPQ) said it has signed a definitive agreement with Mandalay Resources Corporation (TSE:MND) to buy Mandalay’s 100%-owned subsidiary, Lupin Mines Incorporated (LMI).
LMI owns 100% interests in the Lupin Gold Mine and the Ulu Gold Property.
The Lupin Gold Mine was in production from 1982 to December 2004.
Lupin was placed into care and maintenance in February 2005. To date over 3.4mln ounces of gold have been mined and recovered from Lupin with an average mill-head grade of 8.9 grams per tonne (0.259 ounces per ton).
Currently, Lupin holds all permits required to maintain its present good standing including a Type “A” water licence which allows for the transition from care and maintenance to the restart of operations and ultimately to commercial production.
LMI also holds, in restricted cash accounts approximately $27.5mln, which have been pledged through letters of credit to cover future estimated environmental reclamation costs on the Ulu Gold Properties.
The transaction, which is expected to be completed prior to December 31, is subject to the satisfaction or waiver of certain conditions, including WPC completing a private placement or other financing for gross proceeds of not less than $5mln and the receipt of all necessary regulatory approvals.
Upon completion of the transaction, Mandalay will own 20mln common shares of WPC and will have the right to acquire up to an additional 16mln common shares of WPC upon conversion of the convertible note.
WPC shares rose 15.8% to C$0.11 while Mandalay shares were up 3.1% at C$1.00 on Wednesday.
Story by ProactiveInvestors