11/02/2008 - 11:54

Mincor pulls out of Carnilya Hill buy-out

11/02/2008 - 11:54

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View Resources Ltd's hopes of offloading its 30 per cent stake in the Carnilya Hill nickel mine to joint venture partner Mincor Resources NL have been dashed, with Mincor Ltd today terminating the proposed $25 million deal.

Mincor pulls out of Carnilya Hill buy-out

View Resources Ltd's hopes of offloading its 30 per cent stake in the Carnilya Hill nickel mine to joint venture partner Mincor Resources NL have been dashed, with Mincor Ltd today terminating the proposed $25 million deal.

The beleaguered gold and nickel miner View went into voluntary administration last week, following disappointing production results at its Bronzewing gold mine and a prolonged share price slide from 52.5 cents each in June last year, to 13 cents each before its shares were suspended on Friday.

View announced last week that it was unlikely to meet a first quarter 2008 production target at the Bronzewing mine of 30,000 ounces.

Mincor, which has a 70 per stake in the Carnilya Hill Joint Venture, reached agreement with View on January 8 to acquire its 30 per cent stake in the mine and certain other nickel rights.

The key terms of the sale included $22.5 million cash, up to $2.5 million in future nickel royalties at Carnilya Hill beyond the current 14,000 tonne reserve, and Mincor to earn an immediate 70 per cent interest in the nickel rights over all of View's Bronzewing tenements by spending $1 million on exploration there.

A major extension to the Carnilya Hill ore body, located in the Kambalda Nickel District, was discovered by Mincor during 2006 and development of a 15,000 tonne per month nickel operation commenced in July 2007.

View had planned to immediately pay off debts of $14 million following completion of the deal, and channel remaining funds into exploration at Bronzewing.

But Mincor said in a statement today that the conditions associated with the acquisition had not been satisfied by the required date.  

"The parties to the proposed transaction have not agreed on a further extension to the date for satisfaction of these conditions and accordingly the agreement has lapsed," the company said.

"Mincor remains the holder of a 70 per cent interest in the Carnilya Hill Joint Venture, which ... is governed by a joint venture agreement containing standard pre-emptive rights in favour of Mincor."

Mincor said Carnilya Hill, which was currently under development by the joint venture and operating under the management of Mincor, had now entered its production ramp-up phase and work was proceeding on schedule.

 

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