LONDON, UK: Lexington Gold (AIM: LEX), a gold exploration and development company with projects in North and South Carolina, USA, has entered into conditional agreements to acquire a 76 per cent. stake in White Rivers Exploration Proprietary Limited (“WRE”), a South African company with significant gold assets in the Witwatersrand gold fields.
The proposed acquisition, announced on 13 May 2023, will be funded by a combination of share subscription and loan agreements with WRE and its shareholders. Lexington Gold will issue 1.2 billion new ordinary shares at a price of 5 pence per share to WRE shareholders, representing approximately 81 per cent. of the enlarged share capital of Lexington Gold. The company will also provide a loan of £1.5 million to WRE for working capital purposes.
WRE holds tenement interests covering approximately 89,499 hectares in the Witwatersrand gold fields, which have historically produced over 2 billion ounces of gold and are estimated to still contain over 1 billion ounces of gold resources. WRE’s management has estimated that its tenement interests have potential resources of over 37 million ounces of gold (non-JORC/non-SAMREC nor other international standard compliant estimate).
WRE has also established a joint venture with Harmony Gold, the largest gold producer by volume in South Africa, for one of its projects, which has an independently estimated non-code compliant resource of 6.02 million ounces of gold at an average grade of 6.47 g/t.
Edward Nealon, Lexington Gold’s Chairman, commented: “The Board is very pleased to announce this proposed acquisition, which the Directors consider to be a substantial development for the Company. WRE’s assets are located in a world-renowned gold producing area known both to me personally and our South African based CEO, Bernard Olivier. The results of exploration activities across these tenements have so far been extremely encouraging, with early stage assessments indicating sizeable non-code compliant gold resources across the five projects.”
Bernard Olivier, Lexington Gold’s CEO, commented: “This proposed acquisition of WRE, with its substantial portfolio of gold assets, represents a tremendous opportunity for Lexington Gold. The projects are all considered shallow level in terms of gold mining in South Africa and the portfolio comprises, in our view, one of the best gold asset packages in the world. We also look forward to working closely with Mark Creasy who will become a significant shareholder of Lexington Gold on completion. Mr Creasy is considered to be one of Australia’s most successful mining entrepreneurs and we are delighted to welcome him as a supportive partner in our enlarged business.”
Mark Creasy, WRE’s founder and major shareholder, said: “I am very pleased to be part of this transaction and to join forces with Lexington Gold. I have been impressed by their vision and strategy for developing their Carolina projects and I believe they have the right team and expertise to unlock the full potential of WRE’s assets in South Africa.”
The proposed acquisition is subject to certain conditions, including due diligence, regulatory approvals and shareholder approval by both Lexington Gold and WRE shareholders. The company expects to complete the transaction by the end of June 2023.
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