Two GDN Announcemetns to ASX yesterday
GDN 6:35 PM Reinstatement to Official Quotation
http://www.asx.com.au/asxpdf/20070503/pdf/31293j7nzdtlph.pdf
GDN 6:35 PM Uranium mining and exploration venture - assets spin off
http://www.asx.com.au/asxpdf/20070503/pdf/31293gv2vzd441.pdf
URANIUM MINING AND EXPLORATION VENTURE
Uranium Assets Spin Off
• The uranium assets of Golden State Resources and Utah miner White Canyon Exploration are to be spun off in a new ASX-listed uranium mining and exploration entity, to deliver the Company’s shareholders maximum value and exposure to the uranium market. Golden State shareholders will have a priority entitlement in the capital raising for the new company.
• The new entity will hold high grade U3O8 deposits estimated to contain in excess of 1.9 million pounds (a non-JORC-compliant resource – see page 2 for details) and is expected to begin mining operations, given satisfactory confirmatory drilling results and statutory approvals, within the year. The directors of Golden State Resources announce the execution of a Memorandum of Agreement for a mining and exploration joint venture between the Company and Utah-based independent uranium miner White Canyon Exploration LLC to combine their respective uranium-vanadium resource and exploration assets into a specialized uranium mining entity to be listed on the Australian Stock Exchange.
It is anticipated that Golden State and White Canyon will each hold approximately 30% of the new entity, with the remainder to be held by the public as a result of a planned capital raising. It is the intention of Golden State’s directors that there will be a priority entitlement for Golden State shareholders to participate in this raising.
The agreement is the result of six months’ negotiation with White Canyon and will provide the Company’s shareholders with the greatest value for the Thompson Uranium Project and exposure to a much larger advanced project with a short time frame towards mining operations.
The new joint enterprise has distinct advantages:
• In excess of 1.9 million pounds of U3O8 with an ore grade of 0.3% (6.2 lbs per ton) contained in 300,000 tons of ore in high grade sandstone-hosted roll-front deposits, plus substantial exploration potential on the Thompson Project.
• Experienced management, with successful underground uranium mining expertise, who are currently contract mining and shipping ore to the White Mesa Mill, Blanding, Utah.
• Early mine production potential from drilling-defined ore bodies.
• Favourable and proven geology – the Chinle and Morrison Formations of the Colorado Plateau. Utah has historical production of 130 million pounds of U3O8, with 80% from the Chinle Formation.
• All projects are in Utah, USA – a supportive jurisdiction with currently licensed and operating uranium mines and mills.
• An aggressive and ready market for yellow cake product from US electricity utilities. Spot price for uranium has doubled in the past six months to US$113.
Drilling to commence in May
The Company has engaged a drilling rig and lodged application for statutory permits to commence a drilling programme on the Daneros and Geitus bodies. The technical programme will include twinning a large number of the drill holes used in the original assessment, infill drilling certain zones and opening up and relogging old drill holes. The work will evaluate the assessment and reporting criteria of Table 1 of the JORC Code and allow the generation of mineral resources over a period of two to four months, and in time ore reserves in accordance with the JORC Code.
Terms of agreement with White Canyon Exploration LLC
Golden State and White Canyon will contribute their respective uranium interests to the new entity, which will acquire remnant interests in the Daneros and Geitus leases from unrelated parties for US$10,000,000, part of funds to be raised. The new company will own 100% of all assets. There is a pre-existing 15% mill return royalty on the Daneros and Geitus leases, ceded to the previous owner of the leases in 1993.
Indicative timetable
An indicative timetable for due diligence investigations, fund raising and listing will be released within two weeks.