Brookmount Explorations, Inc. Announces Preliminary Agreement to Acquire Australian Gold Business
December 15, 2020 at 09:31 AM EST
Los Angeles, California, December 15, 2020 – OTC PR WIRE – Brookmount Explorations, Inc. (OTC US: BMXI) (“Brookmount”), a Nevada incorporated company with a global gold production and development platform, is pleased to announce that it has entered into a Memorandum of Understanding (“MoU”) to acquire an Australian incorporated company, Wellington Mining & Exploration Pty. Ltd. (“Wellington”), together with mining and exploration permits within the Palmer River Gold Field situated in the Cape York Peninsular region of North Queensland for a total consideration of US$2.8 million in cash. Total area covered by the exploration and production permits is approximately 11,500 hectares of alluvial gold resource and the acquisition includes full extraction and processing infrastructure, including excavators, haulage vehicles, a trommel based gold separation facility, worker accommodation and power generation facilities. (“the Transaction”).
The tenement, (named as “Dog Leg Creek”), lies within the Palmer River Gold Field, a vast area of Cape York which contains rich tertiary gravels, deposited in ancient riverbeds and lakes which developed, over millennia, into numerous water courses containing alluvial “hosted” gold. The area was originally surveyed by Dominion Mining Ltd, an Australian listed company, in the early 1980’s with comprehensive trenching analysis yielding an average grade of 1.2 grams of gold per cubic meter of material. The Palmer basin gold is nearly pure, with an average purity of 98%, however in view of low gold prices through the 1980’s, together with the remote location and lack of adequate roads in the area, Dominion and other Australian gold miners did not pursue their tenements and they were subsequently acquired by Wellington who, in addition to the processing and accommodation facilities, have constructed a heavy-duty access road, eliminating any site access issues. Utilizing estimates of total area and depth of watercourses in Dog Leg Creek, together with average ore grades identified and a gold purity of 98%, total estimated value of remaining gold in Dog Leg Creek is just over US$100 million.
The Transaction will take the form of a purchase for US$2.8 million in cash, whereby Brookmount will acquire 100% of the shares of Wellington, together with in situ assets as described above. As part of the Transaction, Kevin Wood, a highly experienced Australian mining executive, who has been closely involved in developing and surveying the Dog Leg project, will be appointed as project General Manager with responsibilities including restarting production operations at the conclusion of the rainy season in March.
In anticipation of the Transaction, Brookmount has secured a US$500,000 fixed rate convertible funding facility, proceeds of which will be utilized, inter alia, in financing the US$350,000 in costs required to restart production. The funding has been made available by Leonite Capital LLC, a New York based investment firm. The Company is also in the process of securing the funds necessary to close the Transaction which is expected by the end of January.
In announcing the Transaction, Brett Morley, CEO of Brookmount commented as follows: “I am very pleased to report that our strategy of building a portfolio of high-quality gold assets in Australia, which we first foreshadowed several month ago is now being realized. Our objective, to complement our producing and profitable operations in Indonesia with high quality, recoverable gold reserves in Australia, will both enhance our shareholders geographic risk profile and strengthen the Company’s balance sheet in preparation for transition of our listing to a senior exchange. We are truly fortunate to have the opportunity, on this occasion, to not only acquire gold reserve, but also a producing facility which can be brought on stream shortly after closing. With an existing material throughput capacity of 70 tonnes per day and given average material ore grades, over 5,000 oz of gold per year can be generated, with a current market value of approximately US$10mm. We are also fortunate that the continued success of our Indonesian operations gives us great flexibility and enhanced resources to execute our expansion in Australia.
We believe that the addition of the highly experienced Kevin Wood to our management group is a reflection of his belief and commitment to the project and we look forward to closing this Transaction together and taking Brookmount forward in building on this promising start to our Australian expansion.”
Brookmount currently conducts its gold mining and processing operations through its Indonesian subsidiary incorporated in Sulawesi Province, Republic of Indonesia, one of Asia most dynamic and rapidly expanding economies with extensive reserves of natural resources and minerals including timber, coal, gold and hydrocarbons. The Company has also established an office in Melbourne, Australia and is actively expanding its presence in what is one of the worlds leading gold producers.
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