The owner of significant mining leases and processing assets on the Atherton Tableland in Far North Queensland has entered into administration.
The Auctus Minerals-owned Chillagoe Project, which counted the Mungana and King Vol deposits in its portfolio, will be put into care and maintenance.
Richard Tucker and John Bumback of KordaMentha Perth have been appointed as voluntary administrators and will pursue a sale or recapitalisation of the project.
The decision last Friday afternoon was made following a failed buy-out by another Tablelands miner, Consolidated Tin, which failed to secure the funds required for a deposit to purchase the asset.
The combination of the depressed zinc price which fell from more than $US1.30lb to $US.82lb in 12 months was the largest contributing factor, Mr Tucker said.
However, there was every chance of the Chillagoe Project being sold he said.
“There’s been significant investment on the site which is set up for someone to take advantage of,” he said.
“Also, there is the potential that it could be repositioned as a gold operation with a 3 million ounce resource.”
“The current price of gold looks like it will be a constant while the economic outlook is disrupted.
“The depreciating Australian dollar is also a factor in its favour from both a zinc and gold perspective.”
The first meeting of creditors is scheduled for 1 April.
Consolidated Tin Mines made the announcement on Friday it would not go ahead with the acquisition.
The $53 million deal covered the Mungana processing plant, the inactive Mungana mine and the King Vol polymetallic mine, which produces about 360,000 tonnes of ore per annum .
Consolidated Tin Mines (CSD) the transaction had been subject to conditions including shareholder approval.
The company has had issues dispatching a notice of meeting to shareholders to get that approval, as the ASX would not approve the notice until the 2019 audited accounts of Auctus were included in the financial information set out in the notice.
Those accounts had not been finalised or provided, meaning the company could not obtain shareholder approval within the necessary timeframe, Consolidated said.
Although it has terminated the agreement, Consolidated Tin Mines says it still believes the acquisition makes strategic sense.
Perth-based Auctus was expecting to employ 170 people on site during construction of King Vol in 2017. Pybar had a five year contract for mining operations.