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EnviroGold Limited
Media Release/ASX Announcement
08 December 2010
ENVIROGOLD TO PURCHASE MINORITY INTEREST IN LAS LAGUNAS GOLD PROJECT IN
DOMINICAN REPUBLIC
Mr Brian Johnson, Executive Chairman of EnviroGold Limited (ASX Code "EVG")
advises that its wholly-owned subsidiary, EnviroGold Holdings Pty Ltd, has
signed a Sale and Purchase Agreement with Grimston World Inc to purchase
the minority participants interests in the Las Lagunas gold project in the
Dominican Republic.
Mr Johnson said that US$11 million will be paid to Grimston World Inc in
three stages.
EnviroGold has attributed US$6.0 million of the purchase
price to 75% of the Nett Present
Value of Grimston World Incs 6.3% economic interest in the Las Lagunas
project (US$8.0million), and US$5.0 million to its 30% interest in the
projects Albion process plant on
completion of the project (after 6.5 years of operation).
EnviroGold Holdings will pay Grimston World Inc the first instalment of
US$3.0 million at settlement on 20 December 2010, with two further payments
of US$4.0 million due on 31
December 2011 and 31 December 2012.
Interest at 4% pa will be paid on the
deferred payments.
EnviroGold expects to meet the first deferred payment from share option
conversions in December 2011, and the second from cash flows from the Las
Lagunas project.
Mr Johnson said that with 100% of the plant owned by EnviroGold, the
Company would be in a better position to deal with a number of Canadian and
local exploration companies active in the Las Lagunas region, in order to
establish a mining or tolling joint venture which could provide feed to the
Albion plant and extend the life of the project.
The Las Lagunas region contains extensive targets for gold in refractory
ores and includes Barricks 23m oz Au Pueblo Viejo property which is
currently being developed at a cost of US$3 billion.
Mr Johnson said that he believed EnviroGolds process plant would be worth
around US$50 million in situ on completion of the project provided the
Company was able to negotiate continuation of feed to add 5 to 7 years to
the project life, and around US$25 million if it had to be moved to another
site.
Grimston World Inc will transfer its shares in the project development
company to EnviroGold Holdings at settlement.
Mr Johnson said that he was particularly pleased to end the relationship
with the minority partner, and the Company would now move to increasing its
exposure to the rapidly
expanding Dominican gold sector.
To download the full ASX Announcement, please visit:
http://esp.gewru.com/download/files/12414/1286137/20101208%20-%20ENVIROGOLD%20TO%20PURCHASE%20MINORITY%20INTEREST%20IN%20LAS%20LAGUN.pdf
For further information, please contact:
Mr Brian Johnson
Executive Chairman
Email:
Ph: +61 2 4861 1740
Mr James Tyers
Director of Operations
Email:
Ph: +61 2 4861 1740
David Brook
Professional Public Relations
Email:
Ph: +61 8 9388 0944
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