AGV to acquire additional Queensland bauxite projects

Nov.12, 2010 - Australian Gold Investments ( AGV) has reached a binding agreement to acquire 80% interests in the South Queensland Projects from Volcan Holdings Inc, in addition to the recently announced acquisition of 80% interests in the South Johnstone Projects.
The extensive South Queensland Projects include the Childers, Kingaroy and Pittsworth Bauxite Projects, and are believed to contain potential for some of the largest bauxite occurrences in the portfolio.
In addition, AGV has reached binding agreement to acquire the remaining 20% interests in the South Johnstone Projects in Queensland, from Plateau Bauxite Limited, increasing the company s position to a 100% interest.
These acquisitions are conditional only upon shareholder approval and the company anticipates that the shareholder meeting will take place in mid to late December.
Pnina Feldman, company chairperson, said "this is a very important step for AGV in acquiring all of the highly prospective South Johnstone Projects and a significant interest in all of Volcan s bauxite tenements in Queensland.
"The Company will now have an extensive portfolio of bauxite prospective tenements that are ideally placed close to infrastructure and available deep water port facilities. With a ramp up in activity expected to commence shortly we look forward to an exciting period for AGV.
The combined area of the prospective bauxite terrain over all of the Queensland Bauxite Projects is now in excess of 5000 sq. kms.
AGV are now increasingly confident that drilling the Queensland Bauxite Projects could lead to significant bauxite intercepts. Some projects are as close as 18 kms to port in regions of excellent infrastructure and power availability.
The acquisition of 80% interests in the South Queensland Projects from Volcan will be paid by AGV by issuing 40 million AGV shares, together with a $1 per ton royalty on production.
Volcan will hold 43.25% of the issued shares in AGV following completion of the acquisition of the tenements and the issue of the consideration shares.
The acquisition of the remaining 20% interests in the South Johnstone Projects from Plateau Bauxite Limited will be paid by AGV by issuing 15 million AGV shares.
Plateau Bauxite Limited will hold 6.18% of the issued shares in AGV following completion of the acquisition of the tenements and the issue of the consideration shares.
In addition AGV will sell its interest in ML1492 which contains an alluvial sapphire mining project to Volcan in consideration of Volcan paying to AGV $1.2 million in cash within 24 months of AGV receiving shareholder approval for the disposal.