Acquisition

28 Oct 2005 13:50

Mercator Gold PLC28 October 2005 FOR IMMEDIATE RELEASE 28 October 2005 MERCATOR GOLD PLC ("Mercator Gold", "Mercator" or "the Company") Negotiation of Major Acquisition LONDON - Mercator Gold plc (AIM: MCR/MCRW) is pleased to announce that it hasentered into agreement to acquire from St Barbara Mines Limited ("SBM") itsentire gold exploration and mining assets in the highly prospective Meekatharragreenstone belt of Western Australia. The acquisition comprises the 55% balance of the Annean Joint Venture, the3,000,000 tonnes per annum Bluebird mill and gold processing facility andadditional mining and exploration licenses with the potential to transform theCompany from explorer to gold producer. The total purchase consideration willcomprise AUD$18 million (GBP£7,560,000) in cash and new shares plus the adoptionof bonding requirements of approximately AUD$3 million (GBP£1.26 million). The acquisition represents a "reverse" transaction under the AIM Rules, andaccordingly the existing Mercator shares and the warrants of the Company shallbe immediately suspended from trading until either (a) the Company mails to itsshareholders the necessary meeting materials for shareholder approval of theacquisition (expected to be a date no later than 30 December 2005) or (b) thecompany elects not to proceed with the acquisition in accordance with theagreement with St Barbara. The acquisition is subject to a 30-day due diligence period and variousshareholder and regulatory approvals. A more detailed news release will be issued by the Company in due course. Enquiries: Mercator Gold plcPatrick Harford, Managing Director +44 (0) 7786 486645Terry Strapp, Chairman +61 (0) 8 9322 7422Michael de Villiers, Finance Director +44 (0) 207 929 1010 Beaumont Cornish LimitedRoland Cornish + 44 (0) 20 7628 3396 King & Shaxson Capital LtdNick Bealer + 44 (0) 20 7426 5986 Ocean Equities Ltd + 44 (0) 20 7786 4375Will Slack Parkgreen CommunicationsJustine Howarth/Ana Ribeiro + 44 (0) 20 7493 3713 This information is provided by RNS The company news service from the London Stock Exchange