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AuTECO spends A$65m on Canadian mine

The Nugget Pond processing facility forms part of the transaction.

The Nugget Pond processing facility forms part of the transaction.

31st August 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – ASX-listed AuTECO Minerals has struck a A$65-million deal to acquire the Green Bay copper/gold project in Newfoundland, Canada.

AuTECO submitted a bid under the sale and investment solicitation process for Canadian company Rambler Group, which was ordered by the Supreme Court of Newfoundland and Labrador in March this year as part of the restructuring proceedings of Rambler Group.

AuTECO’s bid involved the offer to purchase the assets by way of the cancellation of all outstanding issued capital in the Rambler Group, and the issuance of new shares in the company, and a reverse vesting order (RVO).

Under the terms of the acquisition, AuTECO will provide A$35-million in cash on completion of the transaction, as well as A$15-million worth of shares in the company, amounting to around 600-million shares.

A further A$15-million will be payable no later than 18 months following the completion of the transaction, of which A$7.5-million will be payable in cash and a further A$7.5-million in shares.

A A$3.5-million deposit has been paid which will be deducted from the Stage 1 payments on completion of the transaction.

“Green Bay is an exceptional acquisition opportunity and we were extremely fortunate to be given the opportunity to acquire this asset via the administration process,” said AuTECO incoming MD Steve Parsons.

“It is very rare for a copper asset of this size and grade, with a resource of this magnitude and such immense growth potential, to come up anywhere in the world, let alone in a tier-one mining location like the province of Newfoundland and Labrador.

“The potential to grow the mineral resource quickly is abundantly clear, with extensive high-grade mineralisation intersected down-plunge and highly promising exploration upside in positions parallel and along strike from the existing resource.”

The project currently hosts a 39.2-million-tonne resource, at 2.1% copper for 811 999 t of copper equivalent, of which 68% is in the measured and indicated category. The project was last mined in early 2023, and has been on care and maintenance since then.

The acquisition includes the Ming mine and Nugget Pond processing facility, with the infrastructure valued at more than A$250-million.

The transaction will be funded by a minimum A$50-million two-tranche placement, with Parsons saying the capital raising will enable AuTECO to immediately establish an exploration decline with the aim of rapidly growing resources around historical intersections such as 102 m at 1.7% copper. This intersection is 460 m down plunge of the current resource boundary.

The first tranche of the capital raise will consist of some 347-million shares, at a price of 2.5c each, raising an initial A$8.7-million under the company’s existing placement capacity.

The second tranche will entail the placement of a further 1.65-billion shares, raising a further A$41.3-million.

The second tranche placement was subject to shareholder approval.

Additionally, AuTECO will also undertake a share purchase plan (SPP), allowing existing shareholders to subscribe for up to A$30 000 of new shares, also at a price of 2.5c each. The SPP could raise up to A$3-million.

Edited by Creamer Media Reporter

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