TORONTO (miningweekly.com) – Toronto-based gold miner Alacer Gold on Monday announced the sale of its Australian assets to local miner Metals X for A$40-million in cash.
TSX- and ASX-listed Alacer was on the hunt for a buyer for its Australian assets, and previously warned that it would place these mines on care and maintenance if one could not be secured.
Despite expecting its Australian assets, which included the Higginsville and South Kalgoorlie operations, to deliver a combined production of between 168 000 oz and 187 000 oz for the full 2013, Alacer believed that the projects were dragging down the performance of its high-value Turkish assets.
Under the terms of the agreement, Metals X paid Alacer a A$10-million deposit, which would be held in escrow pending completion of the sale, which is subject to and will occur within five business days following approval from the Australian Foreign Investment Review Board.
Alacer would also retain the right to receive up to A$2-million of deferred cash payable from La Mancha Resources Australia for the acquisition of Alacer's 49% interest in Frog's Leg in April 2013, as well as receive any refund – estimated by Alacer to be up to A$21-million – that may result from an objection to a Western Australian stamp duty assessment paid in connection with the merger that resulted in the formation of Alacer in 2011.
The company added that it would retain ownership of certain long-lead items acquired in advance of the South Kalgoorlie expansion project, which have a book value of A$7-million; and Alacer would no longer recognise in its financial statements A$46-million of mine closure provisions in relation to its Australian subsidiary.
Until the transaction had been completed, Alacer would, however, continue to implement its cash maximisation strategy at Higginsville and South Kalgoorlie.
Metals X would take economic ownership of Alacer Australia from October 1, subject to completing the transaction, and would fund any additional working capital requirements or capital expenditures outside of the cash maximisation strategy plan.
"We are pleased to have negotiated a sale to a Western Australian company that is familiar with our Australian assets. Strategically, the sale of our Australian assets demonstrates our commitment to focus on our Turkish operations,” Alacer CEO Rodney Antal said.
Meanwhile, Alacer announced in a separate statement that it expected gold output from its 80%-owned flagship Çöpler gold mine, in Turkey, to increase 15% to between 192 000 attributable ounces and 200 000 attributable ounces for 2013.
Antal said Çöpler continued to perform at a high level with record quarterly production of more than 68 000 oz in the second quarter.