Canadian-based gold miner Alacer Gold (AQG) has sold its two Australian mines and will focus on its mine in Turkey, as it said it would do back in June.
Alacer told the ASX yesterday that it had agreed to sell the mines to Metals X (MLX), a small Perth based miner, for $A40 million.
The news saw Alacer shares rise 11c or 1.1% to $9.90. Metals X shares rose 1c or 8.3% to 13c.
AQG YTD – Metals X buys Alacer Australia for $40m
Metals X owns a range of tin, nickel and gold projects across Australia and it has paid a $A10 million deposit for the Alacer assets. The deal is subject to Australian regulatory approval.
In June, Alacer said it was selling the two WA gold mines, known as Higginsville and South Kalgoorlie, in part due to their high operating costs.
The Higginsville Operations consist of the Trident and Chalice underground gold operations as well as its 1.35 million tonnes a year gold plant and associated plant and infrastructure and the South Kalgoorlie Operations, which consists of a 1.2 million tonnes a year gold plant and open pit and underground mining potential.
The company said it wanted to focus on more profitable operations in Turkey.
In addition to the A$40 million of cash consideration, Alacer said it will: "Retain the right to receive up to $A2 million of deferred cash payable from La Mancha Resources Australia Pty Ltd for the acquisition of Alacer’s 49% interest in Frog’s Leg in April 2013; Receive any refund (estimated by Alacer to be up to $A21 million) in respect of an objection previously lodged to a Western Australian stamp duty assessment paid in connection with the merger that resulted in the formation of Alacer in 2010; 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 No longer recognize in its financial statements $A46 million of mine closure provisions in relation to Alacer Australia."
Metals X will take economic ownership of Alacer Australia from October 1, 2013 (next Wednesday) and will fund any additional working capital requirements or capital expenditures outside of the cash maximisation strategy plan prior to completion.
Alacer CEO Rod Antal said in the statement that the company was "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. This sale will permit senior management and the Board to focus on creating value in Turkey and the surrounding region for Alacer’s shareholder," he said.
The sale was announced in June by the then CEO of Alcaer David Qinlivan, who then stepped down from his position in August and was replaced by Mr Antal.
