12/08/2013 - 15:40

Kagara cancels sale agreement

12/08/2013 - 15:40

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Base Metals miner Kagara has cancelled the sale of half its remaining Queensland assets after negotiations with the purchaser, which failed to come up with $6 million in deposits for the projects in July, came up empty.

Privately held firm Lucky Metals had been slated to buy both the Northern Chillagoe gold project and the Thalanga and Liontown/Waterloo projects from Kagara for $50 million plus a deferred cash or share component worth up to $8.2 million.

After Lucky Metals did not come up with $6 million in deposits in July, Kagara said today that negotiations with the purchaser and its guarantor, Leedert Van Der Sluys, had ended and a commercial resolution was not reached.

Mungana Goldmines, Kagara’s subsidiary which owns the Northern Chillagoe project, said its preferred course of action would be to recommence the marketing and sales process with Kagara’s administrators, FTI Consulting.

Alternative options will also be evaluated, Mungana said.

FTI said the marketing process would be restarted and a preferred bidder for the Northern Chillagoe would be selected as soon as possible.

Kagara is considering its position in relation to the southern agreement, which remains on foot notwithstanding the continuing breach of the purchaser and a purchaser guarantor,” FTI said in a statement.

Kagara will update the market on the southern agreement again once a decision has been made.”

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