Sydney, Dec 7, 2005 (ABN Newswire) - Allied Gold Limited (ASX: ALD) has sold their Mobile Mineral Processing Unit ("MMPEU") to Tanami Gold NL (ASX: TAM) for AUD$2M while retaining rights to use the patented design on other Allied projects.

The deal involves a half payment of AUD$1M prior to the new year with the balance due by October 2006.

The sale of the plant is part of a rationalisation strategy and advances the development of the Simberi Oxide Project in the New Ireland Province of eastern Papua New Guinea.

Tanami will be using the MMPEU to put its Coyote gold project in northern Western Australia into production by mid-next year and is expected to reduce the construction time and capital costs associated the project in the remote Tanami region of WA.

"Acquisition of the plant will enable the rapid and cost effective establishment of an efficient processing facility on site at Coyote in line with the Company's intention to bring the Coyote Gold Project into production in the June 2006 Quarter," said Tanami chairman Denis Waddell.

The purchase of the plant which is a complete modular treatment plant, will enable Tanami Gold to significantly improve the rate and efficiencies of production from its high grade resource through the processing of up to 450,000 tpa of ore utilising a combination of gravity, conventional CIP (carbon in pulp) and vat leaching extraction techniques.

The plant comprises a two stage crushing circuit, 500 kw ball mill, gravity circuit, small leaching circuit, elution circuit and gold room. Minor modification will be required in Perth prior to relocation to the mine site. Modifications and pre-commissioning tests will be undertaken in Perth over the next two months with relocation planned shortly thereafter.