Tuesday, 5th September 2006 (2224 views)

Luzon Minerals and Republic Gold have agreed, in principle, to combine their two businesses.

The boards of the two companies are currently engaged in finalising a Heads of Agreement, which will be dependent on regulatory approval in both Canada and Australia. In addition, the accord will only go through if due diligence and definitive agreements are made.

The companies share a director, so the transaction is considered Non-Arms Length.

Executives from both companies have been attempting to complete a feasibility study on Luzon's Amayapampa project in Bolivia, in conjunction with Roscoe Postle Associates of Toronto. The study will be finished shortly and a production capacity of 50,000 ounces of gold per year has been targeted.

By this process, the Bolivian resources belonging to Luzon will be added to the resources already held in Australia by Republic. The completed body will hold over one million ounces of measured and indicated gold and 769,000 ounces of inferred gold. Silver resources will stand at 3.24 million ounces of inferred silver and the company will also possess 7,900 tonnes of indicated antimony and 56,100 tonnes of inferred antimony.

Luzon's chairman Willie McLucas said: "This is something that the company has been working towards after first becoming involved with Republic in mid 2005. The combination should create a significant junior exploration and development company with immediate production potential with diversified country risk."

 

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