Home » , » New Guinea Gold sells

New Guinea Gold sells

Staff Reporter | 9:14 PM | |
NEW Guinea Gold Corporation has announced that it has entered into a memorandum of understanding (MoU) with Kibush Capital Corporation (KCC) pursuant to which KCC has agreed to purchase all of the issued and outstanding shares in the capital of New Guinea Gold’s PNG subsidiary, New Guinea Gold Limited.

Under the terms of the MoU, KCC will pay NGG $US5.25 million, net of certain liabilities, to acquire New Guinea Gold Ltd.

KCC will assume responsibility for certain liabilities held by NGGL as at April 30, 2014 and will be granted management rights to the Mt Sinivit goldmine, in East New Britain by New Guinea Gold Limited as of May 15, 2014.

KCC will assume responsibilities for all creditors, loans and legal obligations of NGGL from that date. The transaction is subject to customary provisions, and is conditional upon, among other things, the approval of NGG shareholders and the receipt of any applicable regulatory approvals.

The Board of Directors of NGG has unanimously approved entering into the MoU and will recommend that NGG shareholders approve the transaction at a special meeting of shareholders to be convened and held for the purpose of approving the transaction.

Full details of the transaction will be included in management information circular and related proxy materials to be mailed to shareholders in accordance with applicable securities laws.

New Guinea Gold expects to hold a special meeting of shareholders in late July 2014.

The Board of Directors’ recommendation follows an extensive process by the company to secure additional viable financing needed to meet not only current operational requirements, but to fund the next phase of the Mt Sinivit mine. The Board of Directors believed the transaction provides the best outcome not only for the company, but its shareholders, employees and creditors, and provides a long-term future for the Mt Sinivit mine. New Guinea Gold Chairman, Mr Ces Iewago said: "The project has experienced some very challenging times especially in attracting funding to take the project to phase two mining in light of the global financial crises and the correction in the commodity cycle, especially the drop in gold price.

"For a junior miner, access to capital is critical to survival in these difficult times and we are extremely pleased to have reached this point which augurs well for all the stakeholders, going forward. I am confident KCC will move the project forward to greater heights and unlock the future potential for Sinivit", Iewago said.