Galaxy Gold moves ahead with plans to list

[miningmx.com] — New South African gold mining and exploration company Galaxy Gold Mining on Monday proved that it was progressing with its plans to list on the JSE by the third quarter of this year.

Agnes Gold Mining, which is owned by Galaxy Gold, has entered into a reverse
takeover agreement with Wesco Investments.

In terms of the agreement, Wesco will acquire 100% of the issued share capital of Agnes for not more than R336m, to be settled by the issue to Agnes shareholders of ordinary shares in Wesco at an issue price of 300 cents per share.

On implementation of the acquisition, which is subject to the fulfilment of various conditions including the approval of Wesco shareholders, the Agnes shareholders will own at least 92.22% of Wesco.

Wesco will then change its name to Galaxy Gold Mining and seek a new listing on the JSE.

South African mining entrepreneur Peter Skeat, who is the driving force behind the new company, said Galaxy Gold intends to raise between R250m and R400m through a private placement and the JSE listing.

Galaxy boasts a current SAMREC-compliant resources of more than 1 million
ounces on the Barberton Greenstone Belt (BGB) and wants the funds to prove up a
further 4 million ounces of resource and boost production from a current 18 000
tonnes a month, which yields 23 000 ounces per annum, to 53 000 tonnes a month, yielding 78 000 ounces per annum by December 2011.

It also wants to improve the current SAMREC-compliant resource to up to 5
million ounces by 2014, through an on-going programme of brown and greenfields
exploration.

Galaxy Gold, currently mining under contract, is in the process of acquiring the old order mineral rights and converting these to new order mineral rights.

The new company was born out of the acquisition of the Agnes mine for R17m in 2008.

Since then the company has uncovered 26 known ore bodies contained within its 5 858-hectare mining lease area.

In the last 18 months the company has recommissioned both underground and
surface operations, constructed a Biox plant under license to Gold Fields and has
recommissioned the existing carbon-in-leach circuit at the mine.

Skeat said an estimated R80m had been invested into the operations, R50m from his own pocket.

Wesco originally listed on the JSE in 1968 but after the disposal of its various
investments, the company became a cash shell and then de-listed.

The Ceejay Trust acquired a controlling interest in Wesco in January 2010 and in this capacity negotiated the Agnes acquisition.

Ceejay Trust said it is “confident the Agnes investment will prove to be of
considerable value” to Wesco and its shareholders.