Dragon Mining (ASX: DRA) has acquired the final 20% of the Svartliden Gold Mine in Sweden to move to full ownership, 15 years after securing an initial interest.
Consideration for the 20% purchase is US$1 million in cash, and 500,000 Dragon shares, which last traded at $1.36, therefore placing a current value on the scrip component of around A$680,000.
Dragon secured the remaining 20% from Pioneer Intertrade Company.
The cash consideration provides Pioneer an immediate return from a long involvement in Svartliden, with the scrip component providing continued exposure to the mine, as well as Dragon’s two other gold mines in southern Finland.
Svartliden was brought into production in 2005 and has produced over 255,000 ounces of gold at an average cash cost of $520 an ounce.
Production plans at the mine have been extended out to 2014, due to a successful drilling campaign which commenced in early 2010.
Dragon has been active in Scandinavia for over ten years, and holds an extensive project portfolio that hosts a gold resource inventory of 1.1 million ounces.
Dragon said further growth to this inventory is expected as the company continues to place a high priority on exploration.
The company maintains an aggressive exploration strategy on projects with close proximity to its existing mines and in regional areas.
Dragon remains in a strong cash position with $28.2 million in cash, $5.4 million in net gold concentrate receivables and bullion and $4.3 million of cash deposits lodged with Swedish authorities as rehabilitation bonds, at the end of the March 2011 quarter.