WPG Resources returns to South Australia with gold project purchase

WPG Resources has struck an agreement to buy Mungana Goldmines’ Tunkillia and Tarcoola gold projects in South Australia.

WPG Resources has struck an agreement to buy Mungana Goldmines’ Tunkillia and Tarcoola gold projects in South Australia.

WPG will pay a deposit of $125,000 to Mungana and then carry out due diligence on the projects, which they can then acquire for $1.35 million in cash and 7.5 million WPG shares.

Subject to hitting various milestones, another $1.25 million could be paid to Mungana in stages.

WPG has a successful history in SA, proving up and eventually selling the Peculiar Knob iron ore project northeast of Port Augusta to Arrium in 2012.

WPG executive chairman Bob Duffin said the company was very comfortable working in SA.

“The Tarcoola and Tunkillia gold projects are the types of opportunities we have been seeking for more than two years,’’ he said.

“They fit neatly in our sweet spot — existing resources with additional exploration

potential, where value can be added by our management team with further exploration

aimed at extending the resource base, obtaining all necessary approvals for project

development, the completion of bankable feasibility studies, and eventually the arranging

of project development capital.

“Although WPG is best known as an iron ore company, we floated in 2005 on a package

of gold and copper assets and all of our key executives have had prior experience with

base and precious metals.

“This has enabled us to both set our benchmarks high in our approach to seeking new

opportunities and also to implement an exhaustive appraisal program over a wide range

of projects and commodities.”

The projects, 450km northwest of Port Augusta, have a combined resource, attributable to WPG, of730,000 ounces of gold.

Helix resources will retain a 28 per cent stake in the larger Tunkillia project.

WPG shares were trading almost 10 per cent higher at 3.4c.