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Mon 25 Jun 2012 06:10 PM

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Dubai firm inks $105m gold sales contract

Salam International signs forward sales deal with Malaysia's Daulton Capital Corp

Dubai firm inks $105m gold sales contract

Daulton Capital Corp, a Malaysia-based gold and precious metals exploration company, said on Monday it has entered into a $105m forward gold sales contract with Dubai's Salam International Limited.

Salam, which is a Dubai-based gold trading company which sells to large gold refineries in Dubai and Abu Dhabi, has executed a forward gold sale contract for the sale of 99.9 percent pure gold bullion to the 2nd London Metals Exchange.

The contract is for a term of 36 months and provides for the gold to be delivered 6-9 months from the date of signing, a statement said.

The purpose of the forward gold sales contract is to enable immediate working capital to fund ongoing gold production at the ARX Springs project in Australia, the statement added.

Arun Pudur, president of Daulton Capital Corp, said: “We are pleased to have entered into the agreement on what we consider to be very favourable terms for a company in the pre production phase and look forward to working closely with Salam International, a leading Gold supplier in the UAE.”

Brian Smith, CEO of Daulton Capital Corp, added: “Very few gold companies have ever managed to close a $105m gold sale, much less for a company in pre-production stage.

"We also have the option to increase the value of the contract in the future as Salam’s clients have the capacity to purchase MT of gold.”

Arun Ramachandran, director of Daulton Capital Corp, said: “With these funds we will be able to escalate our production capacity faster than planned and reach near production stage in considerably less time and look forward to start delivery of gold before the time-lines.”

The ARX Springs Gold property is located in Queensland, Australia, and has gold resources estimated at between 16-18m ounces of gold and estimated to generate a cash flow of $22bn over the planned 20-year life of the mine based on current gold prices.

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