BRISBANE, AUSTRALIA--(Marketwire - Aug. 3, 2010) - Intrepid Mines Limited (TSX:IAU)(ASX:IAU) ("Intrepid") advises of the completion of the sale of its Paulsens gold mine in Western Australia.
Intrepid has received an amount of A$20.67 million, representing the initial purchase price payment of A$15 million, the first A$1.5 million purchase price instalment and a royalty on 12,456 ounces of gold production.
The purchaser, Northern Star Resources Limited ("Northern Star"), is now the mine operator.
Further payments due to be made to Intrepid under the terms of the sale are as follows:
- the second and final purchase price instalment of A$1.5 million, due on 31 October 2010;
- production royalties of A$335 per ounce of gold production on a further 38,544 ounces; and
- top-up payments of A$2.5 million each, due upon production of 57,500 ounces and 62,500 ounces of gold respectively.
Intrepid also has an option to purchase the Paulsens plant for A$1 in the event that gold production of 62,500 ounces is not achieved or the top-up payments are not made. In either circumstance, Northern Star assumes liability for closure and rehabilitation costs at Paulsens, estimated at approximately A$5 million.
Intrepid's CEO, Brad Gordon, remarked: "The proceeds generated by this sale, together with the current treasury position, aggregate A$43 million. The remaining payments, if made in full, total a further A$19.41 million.
These funds will be largely allocated to support the exploration activity at our Tujuh Bukit project in East Java, Indonesia."
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