April 26, 2011 / 2:42 PM / in 7 years

UPDATE 1-Guyana Precious Metals expands footprint in Guyana, shares jump

* To buy mine, gold property stake from Guyana Goldfields for $6.1 mln

* Guyana Goldfields to focus on core assets

* Guyana Precious Metals shares up as much as 22 percent

April 26 (Reuters) - Guyana Precious Metals Inc said it would buy certain assets and a stake in a gold property from Guyana Goldfields Inc for $6.1 million, sending its shares up as much as 22 percent.

Guyana Precious Metals, which was formerly known as Coronation Minerals Inc, said it would pay $2.4 million for the Peters and the Aremu mines in Guyana.

The company will also pay $3.7 million and a 1 percent net smelter royalty for Guyana Goldfields’ 70 percent participation stake in the Arakaka property, spread over nearly 80,000 acres.

The move is part of Guyana Goldfields’ move to shed weight and focus on its Aurora Gold project and the Aranka property, also located in Guyana.

The company now plans to deploy a dozen drill rigs at the properties to explore eight identified targets for gold.

Shares of Guyana Precious Metals rose to 25 Canadian cents before inching down to 23 Canadian cents, up 12 percent, on Tuesday morning on the Toronto Venture Exchange. (Reporting by Abhiram Nandakumar in Bangalore; Editing by Joyjeet Das)

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