Resource and Investment NL, a junior resources company that is chaired by Miles Kennedy, is to buy the Fortnum gold project in Western Australia for $35 million.
The project which is located on a 1,800 square kilometer tenement had been shut down in May 2007 due to low gold prices.
Now the company has purchased the Fortnum gold project and its surrounding exploration tenements in Western Australia’s Bryah Basin. Resource and Investment has used a cash and share deal with a Cayman Island hedge fund called BlueCrest to make the acquisition.
The Bryah Padbury basin is said to have high quality gold and copper deposits at the Sandfire Resources. The company hopes that its own tenements north west of Meekatharra will also have good deposits.
The mine life expectancy at Fortnum gold project is likely to be 10 years. A processing plant is also ready in place at the site and Resource and Investment should be able to get to production in under 18 months as per Mr Kennedy.
Mr Kennedy said that the nice thing about this acquisition was that the plant was there, there was a 100 man camp complete with swimming pool, airstrip, water licenses and all the licenses in place. As long as gold prices stay at the current levels the company will make a profit in its first year of production.