PERTH (miningweekly.com) – ASX-listed AuStar Gold will acquire Centennial Mining through a deed of company arrangement (DOCA) to consolidate its landholding in Victoria.
Centennial, which owns the A1 gold mine, near the Woods Point and Maldon carbon-in-leach processing plant, went into administration in March this year.
Under the terms of the takeover offer, AuStar will contribute A$2.4-million in cash to the DOCA, closing the Centennial administration.
Prior to the completion of the DOCA, Centennial and AuStar wouldenter into a merger agreement, under which AuStar would allocate more than 24.98-million shares, or 31.7%, of the company’s total shares, to Centennial shareholders.
AuStar chairperson Frank Terranova on Tuesday said that the company had publicly stated that regional consolidation was a logical part of its overall growth strategy.
“The potential combination of these assets will accelerate our objective of creating a truly sustainable and scalable gold company within the region. AuStar Gold believes that the combination of these assets with obvious geographically, geological, mining, processing and administrative overlap, will unlock and create substantial value for all stakeholders.”
The enlarged AuStar would have producing mines at Morning Star and A1, and would also hold the Rose of Denmark mine, where trial mining has been approved.
Ore mined from the A1 gold mine is currently trucked on a 644 km round-trip to Centennial’s processing facility, near Maldon, but the mine is located only some 15 km from AuStar’s Woods Point gold processing facility, which has available capacity.
Terranova said that the proposed acquisition would provide opportunity for AuStar to supplement the mineral inventories from the Morningstar and Rose of Denmark mines with those of the A1 gold mine, to increase the economic use of the Woods Point processing facility.
Furthermore, the consolidation of the Maldon processing plant will provide a combined operation with the ability to optimise material haulage to the Maldon circuit, lift overall group recoveries and ensure that the higher overall level of contained gold is trucked to the longer haulage leg to Maldon.
Third party toll treatment opportunities will also be explored to exploit the available capacity at Maldon.
Terranova on Tuesday said that integration planning was well advanced, and as part of this, AuStar would be undertaking a complete review of all operational and corporate activities to ensure a fit-for-purpose structure is created.
The takeover offer is subject to a number of conditions, including AuStar undertaking a A$4.4-million capital raise, priced at 0.3c a share, and all regulatory, creditor and shareholder approvals.