21/09/2015 - 14:17

PE funds circle mines

21/09/2015 - 14:17

Bookmark

Save articles for future reference.

Private equity groups are on track to gain control of two mining operations, after Aditya Birla Minerals sold its mothballed Mt Gordon operation, while Atherton Resources looks set to be acquired in a takeover valued at about $56 million.

PE funds circle mines
Aditya Birla will continue to operate its Nifty copper mine in the Great Sandy Desert.

Private equity groups are on track to gain control of two mining operations, after Aditya Birla Minerals sold its mothballed Mt Gordon operation, while Atherton Resources looks set to be acquired in a takeover valued at about $56 million.

In a statement today, Atherton (formerly known as Mungana Goldmines) told its shareholders to take no action towards an on-market takeover offer for all shares in the company for 20 cents each.

The offer, which values Atherton at about $56 million, was lodged by Auctus Chillagoe, which is backed by global private equity group Denham Capital.

However Kagara, which owns a 63.1 per cent stake in Atherton, has signalled its intention to accept the offer.

Auctus has made several attempts at taking control of Atherton; the first time shareholders rejected a 13.5 cents per share offer in June, and then turned down a 17 cents per share offer in July.

Atherton owns the Chillagoe zinc-copper project in Queensland.

Meanwhile, copper miner Aditya Birla Minerals has sold its mothballed Mt Gordon operation in Queensland to private mining company Lighthouse Minerals.

Under the terms of the deal, private mining company Lighthouse will pay $5 million in cash plus a further $10 million if copper prices stay about $4.20 per pound over six continuous months, and will also reimburse up to $500,000 per month in care and maintenance costs until the deal is completed.

Aditya Birla will also receive $41.7 million through the return of an environmental and performance bond.

Mt Gordon was put on care and maintenance in March 2013 as a result of weak copper prices, high operating costs and overall low profitability.

Lighthouse is owned by an affiliate of EMR Capital Resources Fund.

Aditya’s 51 per cent shareholder and offtake partner, Indian company Hindalco Industries, has also agreed to terminate an existing offtake agreement on completion of the transaction.

Hindalco has entered into a new agreement with Lighthouse for offtake.

Aditya Birla will continue to operate its Nifty copper mine in the Great Sandy Desert.

“The transaction reflects the substantial efforts undertaken by Aditya Birla and its employees, and the executives of ANZ Corporate Advisory over the past two-and-a-half years, since Mt Gordon was placed under care and maintenance and a strategic review process was started for the operation,” managing director Neel Patnaik said.

Aditya Birla shares were unchanged at 17 cents at the close of trade, while Atherton shares closed 64 cents higher to 20.5 cents.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options