AN Aboriginal mining contractor has chosen a former dot.com basket case as a funding vehicle via a back-door listing on the Australian Stock Exchange.
The Carey Mining Group, jointly owned by Daniel Tucker and Gino Sceghi, has purchased Carnilya Hill tenements from WMC Resources Limited, situated 25 kilometres north-east of Kambalda.
To effect the sale and to prove up the resources on the tenements, a restructured and re-named View Resources Ltd, which was taken out of administration in April last year following a deed of arrangement with creditors, will use its cash reserves and a share placement.
Formerly called Smartworld Corporation Limited, the firm has shed its Home Automation business and Internet Home Gateway after the business gave its shareholders an $18.6 million loss in the 2000-01 financial year.
Now with a clean balance sheet and more than $800,000 in cash, View Resources has conditionally agreed to a cash payment of $250,000, representing part of the actual cost incurred by Carey Mining. In addition, 100 million View shares and incentive-based payments that are benchmarked against the Carnilya Hill project reaching reserve and production targets will be offered.
Carey Mining (2002) Pty Ltd has been established as the subsidiary, which will effect the sale agreement. If the hurdles are cleared, Carey will hold about 20 per cent of View’s capital.
The Carey Mining contracting mining service business, which employees around 50 mainly Indigenous people, will remain as a separate, privately entity.
Carey Group, established eight years ago, is currently providing mining services to some of Western Australia’s major resource projects including Sunrise Dam, Mt Keith, Carosue Dam, Thunderbox and BHP’s Mining Area C.
Mr Tucker said the completion of the sale was a significant milestone for Carey and, by entering an agreement with an ASX listed company, would assist the company in unlocking the potential of the nickel tenements.
“We consider that by teaming up with a public company we can quickly bring the project to fruition, develop the mining opportunities for Carey and deliver the nickel for WMCR’s Kambalda smelter,” Mr Tucker said.
WMCR general manager operations of nickel, Seamus French, said the sale would open the way for further development of the region by Indigenous people.
“The divestment of these tenements is also consistent with the nickel business unit strategy to divest mature nickel mines at Kambalda and participate in the benefits that a small, focused, ‘third party’ can yield from the remaining resource,” Mr French said.
The Carnilya Hill Project hosts one mine, the Carnilya Hill Mine, which operated between 1979 and 1998, as well as four mining leases covering approximately 2,220 hectares.
Up until its 1998 closure, the Carnilya Hill Mine produced 1.4 million tonnes of nickel ore at 3.38 per cent for 47,000 tonnes of nickel metal valued at approximately $560 million.
At the time of the closure the three-month average nickel price was $US2.24 a pound compared with an average price today of $US3.91 per pound.
“This opportunity presents View with an expedient and low-cost entry into the rank of junior nickel producers,” View said in its ASX announcement of the transaction.
“As demonstrated by Mincor and Independence Gold over the last year, there are significant benefits in acquiring a Kambalda nickel project from WMC Resources Limited.”
© Business News 2018. You may share content using the tools provided but do not copy and redistribute.