Goldbelt provides review extension

Pegasus Gold (TSE) has been given a 3-month extension to complete a due diligence review of its proposed alliance with Goldbelt Resources (VSE).

In mid-September, it was announced Pegasus would inject US$18.4 million into Goldbelt and, in return, acquire a majority shareholding. The agreement is still subject to the satisfactory completion of due diligence. It calls for Pegasus to advance convertible loans of US$3 million on completion of the review and a further US$15 million toward a gold tailings treatment plant in Kazakhstan. Pegasus also agreed to help secure project financing as required and provide up to US$35 million in completion guarantees.

The loans can be converted into Goldbelt common shares. If fully converted, Pegasus would hold about 61.7% of Goldbelt’s fully diluted outstanding shares. A 2-year feasibility study on the tailings project was recently completed. It outlines reserves of 2.8 million oz. gold and 20.2 million oz. silver. The project is held by Kazgold, a Kazakhstan company jointly owned by Goldbelt and the Leninogorsky Polymetallic Combinat.