ASX-listed AuStar Gold has entered into discussions with the administrators of Centennial Mining to acquire the failed miner, as it seeks to grow its Victorian gold operations.
In a statement, AuStar said it entered into discussions with KordaMentha and other parties to assess the potential of proposing a deed of company arrangement to Centennial’s creditors.
Como-based Centennial appointed administrators in late March, a month before it proposed to hold its annual general meeting to approve a $10.4 million rights issue to keep the company afloat.
The company had just $267,000 in cash and $4.1 million worth of debt at the end of 2018.
AuStar’s key asset is the Morning Star underground gold mine and processing plant in Eastern Victoria.
Centennial has several gold projects in the same region, most notably its A1 and Maldon operations.
AuStar executive chairman Frank Terranove said the company has publically advised that regional consolidation is a logical component of the company’s overall growth strategy.
“Bringing these assets together has the potential to accelerate growth for all shareholders, as well as deliver economic benefits to the region.” he said.
“With obvious geographical, geological, mining, processing and administrative synergies, the possible asset combination has the potential to create a platform for sustained growth within Victoria and beyond.”