San Diego, USA — MININGREVIEW.COM – 11 June 2008 – Eastern Goldfields Inc. (EGI) – a junior gold mining company with operations in the Barberton goldfield of South Africa – has purchased Barbrook Mines Limited, near Barberton in the Mpumalanga province.
A news release issued here said the purchase from Caledonia Mining Corporation was handled by EGI’s wholly-owned South African subsidiary, Eastern Goldfields SA (Pty) Ltd (EGSA). The company paid approximately US$9.3 million (R70 million) in full settlement for the entire share capital and loan claims of Barbrook Mines Limited.
The release added that the purchase of Barbrook Mines provided EGI Group with an existing production infrastructure, and was ideally located to provide synergies with EGI’s existing and future operations. The mineral resources at Barbrook bring the group’s resource base to an estimated 4.2 million oz.
EGI President Mike Mc Chesney stated: “We are delighted to close this acquisition which adds substantially to our long-term growth in gold production. This transaction is consistent with EGI’s continuing strategy in building the company, and we believe that it will create significant value for its shareholders."
Eastern Goldfields Inc.’s only current operating mine in South Africa – the Lily Mine – is situated in the north-eastern region of the Barberton Mountain-land, and its operations include an open pit, a metallurgical plant, an assay laboratory and related infrastructure.
The most recent drilling of the Lily Mine ore-body resulted in the delineation of mineral resources estimated to be 700 000 oz. The company’s intention is to increase production to 100 000 oz of gold a year.