An agreement has been signed enabling Caledonia Mining (TSE) to acquire Scottish-based gold explorer Fynegold Exploration for US$4.25 million plus 500,000 Caledonia shares.
Fynegold holds licences and rights to explore for and develop precious metals throughout 60,000 acres in the central highlands of Scotland, a land package which stretches north from Loch Fyne for a distance of 24 miles. These rights are contiguous to 170,000 acres already held by Caledonia, which also holds exploration rights to more than 31,000 acres in the Strath of Kildonan, in northern Scotland.
Fynegold has completed a feasibility study for the development of a mine at Cononish near Tyndrum in the central highlands, where exploration and underground development have outlined proven, probable and possible reserves of 825,000 tons at 0.23 oz. gold and 1.25 oz. silver per ton. Caledonia considers the potential for finding additional reserves in the Cononish area to be quite good.
The project has received government approval, and Caledonia intends to proceed with the project as soon as adequate financing has been arranged. Capital costs are estimated at $16 million and the mine is forecast to produce 23,000 oz. gold per year at a direct operating cost of US$200 per oz. In addition to the Cononish orebody, Fynegold has discovered 36 gold showings elsewhere in the licence areas. Little or no follow-up work has been carried out at these locations. Previous exploration work carried out by Caledonia on its adjoining areas in the central highlands indicates that the ground is also prospective for precious metals.
The deal, which is expected to close on Jan. 26, has yet to be approved by regulators.
Be the first to comment on "Caledonia in Scotland"