Consolidated Tin Mines Ltd has entered into a binding term sheet with the administrator of Auctus Minerals Pty Ltd and Auctus Resources Pty Ltd, which is intended to result in the acquisition of 100 per cent of the shares in Auctus, via a Deed of Company Arrangement (DOCA) for a cash and debt free price of A$26.5 million.
Auctus holds 100 per cent of the Chillagoe Base and Precious Metals Project (Chillagoe Project), which is located 200 km west of Cairns in Queensland, Australia. The Chillagoe Project is currently on care and maintenance, and includes the Mungana processing plant, the inactive Mungana mine and the King Vol polymetallic mine. Consolidated Tin Mines said consolidation with its existing mines and processing facilities in the region delivers a well-diversified, high-grade, long-life polymetallic business.
A previous agreement to acquire Auctus by Consolidated Tin Mines for $53.3 million fell through in March and Auctus Resources was placed into voluntary administration.
“We are pleased to announce we have at last reached agreement on the acquisition of Auctus and the Chillagoe Project, which we believe is transformational for CSD and our shareholders. The transaction establishes CSD as a leading independent base metal producer,” said Ralph De Lacey, Consolidated Tin Mines managing director. “The acquisition of the Chillagoe Project is aligned with, and part of the CSD’s overarching growth strategy. It delivers a strategic portfolio of producing and development assets, with outstanding gold and base metals exploration prospectively – all in close proximity to CSD’s existing operational footprint. We expect to unlock clear economies of scale and substantial synergy benefits, including better matching ore production, grade and blending with milling capacity, from putting these two sets of assets back together.
“Critically, we are buying a business that has been heavily invested in by its previous owner with over US$200 million invested in the project. This provides us with a well-capitalised operating base from which to leverage the multiple high-grade production and development opportunities that exist.
“A key aspect of the Chillagoe area is the potential gold producing potential with significant gold mineralisation identified in the vicinity of historic Red Dome gold mine, the Mungana Mine and other areas. This gold producing potential will be a high priority for the company in the short to medium term.
“We look forward to delivering for shareholders on the substantial upside opportunities that the Auctus assets offer our existing business,” concluded Mr De Lacey.
Consolidated Tin Mines proposes to change its name to Aurora Metals Limited as part of the business transformation. The agreement contains several conditions precedent including approval by the Auctus creditors, the Foreign Investment Review Board, and Consolidated Tin Mines shareholders.