AngloGold Ashanti and Australian partner differ on interpretation

An Australian gold explorer in the Tennant Creek field of Australia's Northern Territory clearly has a difference of opinion with the mighty AngloGold Ashanti Ltd on terms for a claw-back arrangement.

PERTH - 

Westgold Resources Ltd (ASX: WGR) said today that it had defined a maiden JORC resource on its Rover field project at Tennant Creek of 1.037 million ounces, the size of which triggered a claw-back arrangement for AngloGold Ashanti Australia.

However, while AngloGold Ashanti advised Westgold that it elected to retain its claw-back right over the Rover 1 resource by nominating a 20.8 square kilometre area of interest, Westgold had a different view.

The Australian company claimed that the area under question was, according to its legal advice, not subject to a claw-back agreement.

Westgold's said that the agreement in AngloGold's view related to the far eastern portion of the licence that "partially hosts" the Rover 1 resource.

AngloGold's interpretation of the option period was that it expires 30 days from the date Westgold notified AngloGold that Westgold has completed a feasibility study on the Rover 1 resource.

This, Westgold said, was inconsistent with its interpretation of the agreement that the option period expires 6 months from the date that Westgold gave notice to AngloGold of the definition of the Rover 1 resource.

Under AngloGold's interpretation of the clawback option, it has the right to acquire a 75% interest in the option by paying Westgold three times accumulated expenditure. If Westgold failed to establish a resource of more than 2 million gold equivalent oz at the date of exercise of the option, then AngloGold must then sole fund further exploration expenditure to increase the resource to a minimum size of 2 million gold equivalent oz within two years of exercising the option.

It was then contended by AngloGold that it must sole fund completion of a revised feasibility study.

Westgold said it intends to continue with the current planned 2010 drilling at Rover 1 to advance the project towards feasibility.

This programme was expected to cost $A10 million, with a large portion of the expenditure earmarked for infill drilling at Rover 1 plus other drilling targeting new discoveries outside of the joint venture area.

SUBSCRIBE to Mineweb.com's free daily newsletter now.

Disclaimer

MINEWEB is an interactive publication, with rolling deadlines through each day, commencing in the Sydney morning,  and concluding, 24 hours later,  in the Vancouver evening.  If you believe your side of an issue deserves inclusion, but has failed to meet one of our deadlines, you are invited to notify the Editor in Chief in Johannesburg, and we will include you in our editing and expanding on our stories. Email him at alechogg@gmail.com

Print story      Email story      Subscribe to free newsletter

Back