AIM-listed Davos Resources Plc has agreed to pay more than $71 million for the key assets of failed group Croesus Mining NL, whose remnants are also subject to a recapitalisation offer from company rehabilitators, Ascent Capital Holdings Pty Ltd.
AIM-listed Davos Resources Plc has agreed to pay more than $71 million for the key assets of failed group Croesus Mining NL, whose remnants are also subject to a recapitalisation offer from company rehabilitators, Ascent Capital Holdings Pty Ltd.
AIM-listed Davos Resources Plc has agreed to pay more than $71 million for the key assets of failed group Croesus Mining NL, whose remnants are also subject to a recapitalisation offer from company rehabilitators, Ascent Capital Holdings Pty Ltd.
Under the deal struck by administrators Vincent Smith and Bryan Hughes from Pitcher Partners, Davos will pay $66 million in a mixture of cash and shares as well as assume a $4.8 million liability to the state government to take control of Australia’s longest operating gold mine in Norseman.
An $8 million deposit has been paid from the estimated $44 million cash component of the deal, with the balance understood to be convertible notes.
When Croesus collapsed in June under the weight of its hedge book, it had a market capitalisation of $100 million and liabilities of about $75 million.
The deal is subject to creditor approval.
Davos chaiman David Steinepreis said the bidding process was competitive but he believed the Davos offer was better priced because it understood the mine best through the expertise of Barry Cahill, who has been running the operation for the administrators.
Mr Steinepreis said Mr Cahill would become CEO of Davos, which would be renamed to something akin to Norseman Gold, and become dual-listed on the ASX.
“He has been key to us understanding the assets, where they have come from and what the future is,” he said.
“The mine has improved every month since August.”
Davos was floated on AIM in October and doesn’t own an operating mine.
Mr Steinepreis also represents Ascent, though he said the two deals were negotiated separately.
Under the recapitalisation deal, Ascent will pay $800,000 for the Croesus shell and a number of lesser assets such as some royalty interests and two joint ventures, one in platinum and the other a gold project with KCGM.