Brisbane, Aug 14, 2008 AEST (ABN Newswire) - Kangaroo Metals Limited (ASX:KML), a diversified exploration and mining company with projects in North Queensland and Tasmania, has signed a purchase agreement for the California Creek Alluvial Tin Mine. As part of the conditions precedent, KML will now undertake due diligence to assess the value of these assets to KML operations.
The California Creek alluvial mining operation is centrally placed on KML's current California (EPM14877) and California West (EPM14357) tenements. The current mining operation consists of 15 mining leases covering 25km of creek bed and the processing plant site (shown in red, above). Being surrounded by KML exploration leases, extension of the current mining leases to take in additional ground along feeder creeks, paleoterraces and tailings, in the near vicinity, will be investigated.
The mine site has a fully operational camp site, which accommodates 6-12 staff with full amenities, solar power, gas and communications, and will serve as a base for further exploration as well as mine operations. The equipment to be acquired as part of the agreement comprises a 90m3/hour processing plant, clean-up tables and magnetic separators, 75 tonne truck, 45 tonne wheel loader, 20 tonne wheel loader, 30 tonne excavator, grader, 17 yard Mack truck, generators, pumps and a fully equipped maintenance bay. The site is remote and amenable to 24/7 operations.
Due Diligence at the site will look to assess grades and compare the data against previous exploration results. The site has been divided into four (4) operational zones with a target of 750+ tonnes of SnO2 concentrate for each zone (3000+ tonnes total), with additional off-lease areas to be assessed post due diligence to add to the available inventory.
Due diligence samples will be separated using a Knudsen Bowl and further assayed with the results expected within a fortnight. Sizing of the panned cassiterite has shown course through fine distribution of yellow, red and black cassiterite, all of which are amenable to gravity separation on jigs.
Strategic Development at California Creek:
KML identified and assessed this site for acquisition as part of the strategic development for the Company. The acquisition of the Riverside Alluvial Mine in Tasmania was targeted for the right to use and reproduce the mobile plant, which has a capacity of 250m3/hour at a 90% run rate.
With the successful completion of this agreement, KML will endeavour to place a least one of these mobile units at California Creek to increase available throughput from 2000m3/day to 7500m3/day. The mobile plant will minimize haul distance and allow onsite processing at the lower reaches of California Creek, minimizing extraction costs and increasing returns.
Details of the Agreement:
Due Diligence is to be completed by 31 August 2008. An initial sum of $50,000 is payable for the due diligence period and exclusivity, with final conditions to be met on or before 31 October 2008. The final sum of $5.55million is payable before 31 November 2008.
"This asset is a potential company maker for KML, and we are happy to be given the opportunity to assess the site for acquisition. California Creek has been held by two well known North Queensland tin miners since the last price crash and no operations have been carried out since 1985. This has kept a rich and well planned operation intact during the hard years, and we hope to benefit from that good planning. While our due diligence target is set at 3000 tonnes, our expectations are that we will identify a significant premium on this in and around the leases."
Contact
Dr Brett Teale
Managing Director
WEB: www.kangaroometals.com.au
TEL: +61-7-3161-0397
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