Victory West Moly Ltd. July 28 said it executed an agreement with XS Platinum Ltd. to acquire that company’s shares. According to the Western Australia-based explorer, XS Platinum plans to begin producing and selling platinum and gold by the end of 2009.
Victory West, which is exploring for molybdenum in Indonesia, agreed to issue 250 million of its shares and 100 million options exercisable at A25 cents per share for five years to acquire XS Platinum. The company also agreed to advance A$10 million to the platinum company to be used to purchase equipment and conduct trial mining operations on placer platinum acreage that covers the historic Platinum Creek Mine in Southwest Alaska.
Victory West said the acquisition will better position it to become a multiresource company with assets of strategic significance and economic importance.
XS Platinum is an unlisted public company that owns 195 placer and hard-rock mining claims in the Salmon River Valley near the township of Platinum. More than 500,000 ounces of platinum have reportedly been produced since the 1920s on the 3,000-acre, or 1,245-hectare, property.
XS Platinum plans to reprocess tailings dredge tailings from mining carried out on the property between 1937 and 1976. These tailings are believed to contain significant amounts of fine-grained platinum and gold that the junior hopes to recover using modern gravity separation techniques.
XS Platinum also aims to explore the potential to extract platinum and gold from the virgin gravels on the property that have not been the subject of historic mining activities. Victory West also said Platinum Creek has a number of the mining claims that cover hard-rock prospects that are thought to be the source of the platinum group elements in the overall alluvial deposits.
XS Platinum plans to conduct a small-scale, bulk-sample program in August, which should provide the company with valuable production and geological data, and achieve actual platinum and gold sales by year’s end. Victory West said all necessary mining, processing, sales and environmental approvals are in place.
Victory West said XS Platinum acquired the Platinum Creek Mine from Hanson Industries Inc in November 2007 for US$50 million to be payable in 10 installments between the purchase date and December 2015 with a simple interest of 7.5 percent annually on the balance owed.
Victory West also said it, along with XS Platinum, will continue with ongoing due diligence on each other and work towards merging the two companies around the end of the year.