06/07/2012 - 11:49

Bass Metals revived by sale of Hellyer

06/07/2012 - 11:49

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Bass Metals revived by sale of Hellyer

Tasmania-focused miner Bass Metals has cleared its debts by offloading its subsidiary Hellyer Mill Operations to Singapore-listed investment house LionGold Corp for $13.5 million.

LionGold will also take a placement in Bass, under an agreement announced today, of 58 million shares priced at 1 cent each, taking its stake in the Perth-based miner to 16.5 per cent.

Hellyer Mill Operations holds the mining licence for the Hellyer Tails resource at the Hellyer gold mine in Tasmania, which comprises 9.5 million tonnes at 2.6 grammes per tonne gold, and 104g/t silver.

HMO also owns the processing plant at Hellyer, and has a sublicence agreement with Bass for the development's Mt Charter gold resource.

Bass will retain exploration rights over the Hellyer mine lease through a sublease agreement, and will retain access to the Hellyer mill, which is expected to remain on site.

The transaction will leave the company debt free, with forecast cash-on-hand of $6 million, with an additional $2 million to be held in a retention account, giving it sufficient working capital to kick off planned exploration programs in Tasmania and pursue new project opportunities.

Managing director Mike Rosenstreich said the company's financial position would be revived by the transaction, and Bass Metals was buoyed by the opportunity to forge close ties with an international resources group after it experienced technical issues earlier this year, which brought about “stressful financial circumstances”.

The sale remains subject to Foreign Investment Review Board and shareholder approval.

At 11:30AM, WST, Bass Metals stocks were up 6.7 per cent, at 1.6 cents.

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