Gold miner CNMC Goldmine Holdings has signed an agreement with the Kelantan state government to acquire a majority stake in a Malaysian mining company which holds 11 exploration and mining licences. The tenements in northeast Malaysia are prospective for gold, iron ore and feldspar.
Under the deal, Singapore Catalist-listed CNMC will buy a 51% stake in Pulai Mining Sdn Bhd for S$4.4 million in cash. The deal was first announced by CNMC in June last year as a non-binding letter of intent. The remaining 49% is owned by Kelantan State Economic Development Corporation (KSEDC), Sumberjaya Ventures, Centurion Resources and CM Strategic Holdings.
CNMC says it has satisfactorily completed its due diligence investigations and is on track to complete the acquisition, which will expand its mining footprint in Malaysia by nearly five times.
The brownfield project spans 38.4sqkm and is almost four times the size of CNMC's flagship operating Sokor gold field which is about 105km away and also in Kelantan state.
CNMC chief executive Chris Lim said, “This is a major milestone for CNMC. Just as we managed to turn Sokor into a gold producing mine after several years of exploration work, we hope we can do the same for the Pulai project, and hopefully within a shorter time frame.
“The prospect of being able to produce not just gold but also iron ore and feldspar makes this project all the more exciting.”
Upon completion of the acquisition, CNMC will commence geological exploration to uncover any potential mineral resources that comply with the internationally accepted JORC code.
The brownfield project has features similar to those at Sokor, according to an exploration exercise carried out from October 2014 to April 2015 by China Railway Resources Exploration Co Ltd. Past production data also points to strong potential for more gold to be uncovered at the site, which yielded over 260kg of gold between March 2011 and May 2013.
Chris Lim said the significant progress in sealing the Pulai Mining subscription underscored the close ties between CNMC and KSEDC.
CNMC has been working with KSEDC, which is responsible for the overall economic development of Kelantan, for more than 10 years at Sokor. KSEDC is a shareholder in Pulai Mining as well as CMNM Mining Group Sdn Bhd, CNMC’s operating subsidiary for Sokor.
CMNC has produced more than 100,000 ounces of gold at Sokor since 2010, when it achieved its first gold pour. Output at Sokor reached 31,206 ounces in 2015.