Gold Mines of Sardinia Limited

A.C.N. 009 234 851

12 Apr 2000
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12 April 2000

Gold Mines of Sardinia agrees to buy Homestake’s interest in Navan Resources

and

Strategic alliance with Homestake on exploration of Sardinia.

Acquisition

Gold Mines of Sardinia Limited ("GMS") has conditionally agreed to buy 6,500,000 ordinary shares (10.53%) in Navan Resources plc ("Navan") from Homestake Mining Company of California ("Homestake") in exchange for the issue to Homestake of new ordinary shares in GMS.

The exact number of new GMS shares to be issued will be determined from the average daily closing prices of the shares of GMS and Navan from 27th March 2000 to a date that is six days prior to Gold Mines of Sardinia posting formal documents relating to the proposed acquisition to its shareholders. This is expected to be towards the end of April 2000.

At yesterday’s closing prices Homestake would own approximately 7% of GMS.

Joint venture and right of first refusal

Gold Mines of Sardinia has also agreed that, subject to the acquisition taking place, and subject to Homestake retaining at least 50% of the shares it acquires, Homestake may have:

 

 

For a period of up to 3 years, the right to nominate up to 20% of GMS’s licence area, excluding Furtei and Osilo, as a joint venture area. In any such joint venture GMS would have a 25% interest and Homestake would have a 75% interest and would be obligated to pay 100% of all of the costs of the joint venture through to the completion of the final feasibility study.
the right to match within 30 days any offer GMS may receive from a third party to acquire any part of GMS’s Licence Area or any other interest in GMS’s Sardinian subsidiary.

Conditions

The acquisition is subject to mutual due diligence and is conditional on (inter alia) approval by Gold Mines of Sardinia’s shareholders and ratification by Homestake’s board.

Comment

Peter Hambro, Chairman of Gold Mines of Sardinia, said:

"This agreement is an important step for the company. At a stroke it introduces a strategic partnership on Sardinia and broadens the company’s geographic base. Navan has an extensive gold mine at Chelopech in Bulgaria with similar characteristics to Gold Mines of Sardinia’s operations and also has base metal mining operations in Spain.

The alliance with Homestake has the potential to help accelerate the exploration of Sardinia's resources.

I am delighted that we have entered into this agreement with Homestake, a company with whom I have collaborated in the past.."

Background

Gold Mines of Sardinia holds an exclusive right to explore for precious metals on the island of Sardinia. It currently operates a gold mine in the south at Furtei (established in 1997) and in 1999 expanded its operations to a site in the north at Osilo. Shares in the company are listed on the Australian Stock Exchange and London's alternative Investment Market (AIM).

Homestake Mining Company is an international gold mining company with operations and exploration activities in the United States, Canada, Australia and Chile. The company also has active exploration programs in Argentina. Shares on the company's common stock are listed on the New York Stock Exchange, the Australian Stock Exchange and the Basel, Geneva and Zurich Stock Exchanges in Switzerland. Homestake began gold mining operations over 120 years ago, and is one of the oldest listed companies on the New York Stock Exchange still in its original business.

Contacts

For more information, please contact:

Gold Mines of Sardinia

John Morris
Gold Mines of Sardinia Limited
Chelsea Professional Centre
3/145 Stirling Highway
Nedlands, WA 6009
Phone: +61 8 9389 7711
Fax: +61 8 9389 7722
e-mail: gms@gmsltd.com.au

 

Joel Beckman, Edelman PR Worldwide

+44 20 7344 1511

jbeckman@edeluk.com

 

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Last modified: May 01, 2001