PERTH (miningweekly.com) – ASX-listed metals miner MMG has announced the divestment of its Century zinc mine, in Queensland, to fellow-listed Attila Resources.
Century was Australia’s largest opencut zinc mine before mining ceased in August 2015. The last ore recovered at the mine was processed in the first quarter of 2016.
MMG recently completed an agreement with privately held mine rehabilitation company Century Bull, through its subsidiary Century Miner Rehabilitation Project (CMRP), under which CMRP would acquire all of the Century assets and infrastructure.
The CMRP-MMG contract included a A$34.5-million contribution from MMG towards future rehabilitation work, as well as care-and-maintenance activities, and the establishment of a special purpose trust of A$12.1-million to meet existing community and stakeholder obligations.
In addition, MMG agreed to procure and stand behind the ongoing provisions of bank guarantees of A$193.7-million to meet the Century mine financial assurance bond for up to ten years.
Attila has now entered into a binding earn-in agreement with Century Bull for the up-front acquisition of 70% of the issued capital of CMRP in exchange for 30-million options, a 2% royalty and sole funding the project based on expenditure of A$10-million over the first three years, with a further option to acquire the remaining 30% in CMRP.
MMG said on Wednesday that the disposal of the Century mine assets and infrastructure followed a competitive sales process and added that the disposal would benefit the company by allowing it to remain focused on the development and operation of world-class mining assets.
The Century mine contains a Joint Ore Reserves Committee-compliant indicated and inferred resource of some 2.5-million tonnes of zinc equivalent, spread over the Century tailings deposit, the Silver King deposit and the East Fault Block deposit.
The project also includes a seven-million-tonne-a-year processing plant and operationally ready mine site, a 700-man mining accommodation camp, a slurry pipeline and dedicated port facilities.
Studies previously conducted by MMG have demonstrated the potential for viable near-term operations at the Century Tailings and Silver King deposits, using existing site infrastructure.
Attila on Wednesday said restarting operations at Century, initially via tailings reprocessing, would allow much of the scheduled rehabilitation work to be achieved through new cash-flow-generating site activities.
In addition to tailings reprocessing, extraction of defined in-situ base metal deposits, phosphate deposits and regional toll treatment opportunities will also be assessed, potentially providing further economic benefits and assistance towards scheduled site rehabilitation.
Attila noted that the planned restarting of operations and the long-term ongoing infrastructure use also eliminated the need for infrastructure dismantling and final closure activities until potentially well after 2050.