Conroy Gold strikes €7m deal on mining venture

Under terms of the deal, Anglo Asian will invest at least €4m in developing a gold mine at Conroy's key site southeast of Clontibret. It plans to spend a further €3m pursuing prospects at other Conroy Gold-licensed sites stretching from Slieve Glah in Co Cavan across the Border to Clay Lake in Co Armagh.

Conroy Gold and Natural Resources, the company's whose proposal it is to mine for gold near Clontibret in Co Monaghan, have reached a €7 million joint venture agreement with a London firm that operates gold, copper and silver mines in the central Asian nation of Azerbaijan.

The Conroy licences cover more than 800 square kilometres in a major gold district in the north-east of Ireland, known as the Longford-Down Massif, which the company believes contains a 500,000-ounce resource, and Clay Lake, which has long been considered highly prospective.

The Joint Venture goal is the development of a gold mine and further exploration and development along the district scale gold trend which the Company has discovered in Ireland.

Led by Richard Conroy, the firm announced it had reached the the multi-million agreement with Anglo Asian Mining PLC (LON:AAZ) earlier this week.

Conroy Gold's shares nearly doubled in the initial hour of trading post announcement, leading to Conroy Gold being valued at £5.5m (€6.1m), a new two-year high.

Under terms of the deal, Anglo Asian will invest at least €4m in developing a gold mine at Conroy's key site southeast of Clontibret.

It plans to spend a further €3m pursuing prospects at other Conroy Gold-licensed sites stretching from Slieve Glah in Co Cavan across the Border to Clay Lake in Co Armagh.

Anglo Asian will receive an initial 17.5pc stake in three newly created joint venture companies.

If it invests the full €7m envisaged, this stake could increase to 55pc.

Anglo Asian will also receive warrants for Conroy Gold shares which could convert into a 7.45pc stake in Conroy Gold itself.

As part of the deal, Anglo Asian has deposited €250,000 into a segregated account to fund the start of its Irish work. This will be doubled once the agreement is signed and will be regularly topped up.

The Company’s eight gold exploration licences in Finland and one other licence owned by Conroy Gold in Ireland are not subject to the proposed Joint Venture and will remain100% owned by Conroy Gold.

The investment by Anglo Asian in Ireland is expected to take place over the next three years.

In the event that these work programmes are not carried out in full, Anglo Asian will retain a reduced interest in the Joint Venture Companies dependent on the total amount of its investment.

Professor Richard Conroy, Chairman, commented on the agreement, saying that the Heads of Terms agreement with Anglo Asian is a “very significant step” forward for Conroy Gold and its shareholders. “Anglo Asian is an established gold producing company generating significant positive cash flow and is debt free. I am particularly encouraged by its expressed intention to proceed with the project in the immediate term.”