The Chinese are seemingly closing in on Phoenix Gold as analysts suggest the Kalgoorlie-based explorer is becoming an increasingly attractive takeover target.
Valued at $54.4 million yesterday, Phoenix signed a deal with Chinese-owned Norton Gold Fields to develop the Catherwood mine, about 25km west of Kalgoorlie-Boulder.
Mining is expected to begin in three months and should initially produce 19,000oz, generating about $5m for Phoenix to explore its flagship Castle Hill project.
“This agreement combined with earlier stockpile sales agreements with Norton have satisfied our objective of generating cash internally to self-fund further work on our core projects,” Phoenix Gold managing director Jon Price said yesterday.
Norton, recently acquired by China’s biggest gold miner Zijin Mining Group for $229m, will process the Catherwood ore at its 3.5Mtpa Paddington mill.