Announcement

Strategic Focus on South Korea - WA Asset Sale Process

01 April 2019

Southern Gold’s WA Assets, including Cannon Gold Mine, up for sale

  • PCF Capital Group engaged to run formal sale process
  • To be completed in approximately 3 months
  • Allows strategic focus on the South Korean assets, including near term development at the Kochang and Gubong projects

Strategic Context

Australian gold company Southern Gold Ltd (“Southern Gold”, ASX ticker SAU) is pleased to advise that it has executed an agreement with the PCF Capital Group to run a formal sale process to dispose or restructure the company’s gold assets to the east of Kalgoorlie in Western Australia.

This decision was the result of a company-wide strategic review which concluded that there would be significant benefits to shareholders by:

  • Releasing value from our asset base that is currently undervalued on a collective basis as implied by Southern Gold market capitalisation on the ASX;
  • Obviating the need for additional capital to be raised for the development of the Cannon Mine, which was likely to be highly dilutive to current shareholders; and
  • Concentrating on the company’s South Korean assets where we can generate excellent value from the high-quality portfolio.

This last point is especially important because Southern Gold has confidence in:

  1. the significant value that will be released from near term gold production from our 50% interest in the Gubong and Kochang projects; and
  2. the likelihood of making new gold-silver discoveries from an excellent portfolio of high-grade Au-Ag epithermal projects, including several ‘walk-up’ drill targets that have never been drill tested in South Korea.
This approach will also release funding to the company and support our capital requirements for the new financial year 2019-2020, and potentially beyond.


To read the complete announcement please download the pdf below:

Strategic Focus on South Korea - WA Asset Sale Process