Metro Mining has entered binding agreements to increase its ownership in Gulf Alumina to about 39 per cent of the total issued capital of Gulf.
Metro Mining’s Bauxite Hills project, about 95km north of Weipa on Cape York, is adjacent to Gulf Alumina’ Skardon River bauxite project.
Metro expects to be in production in the third quarter of next year, transporting up to 5 million tonnes per annum of Direct Shipping Ore (DSO) bauxite down the Skardon River to port.
Metro chief executive officer Simon Finnis says the key focus continues to be the near-term development of Bauxite Hills while remaining open to bringing about the logical combination of Metro and Gulf’s projects to unlock significant synergies and commercial benefits for the shareholders of both companies.
Earlier this month Mr Finnis told shareholders an independent expert appointed by Gulf during the initial takeover bid had identified more than $200 million in Metro and Gulf merger synergies.
Reduction of joint pre-production capital expenditure from A$92 million to (circa)A$75 million.
Reduced average operating costs from A$19.0 per tonne to A$17.2 per tonne (excluding royalties)
Removal of duplicated corporate costs.
An enhanced ability to secure funding to develop both projects
A greater depth in the team led by experienced Metro executives.
Under the agreements announced yesterday Metro will acquire the shareholdings of four long-term Gulf shareholders. Total cash consideration for the acquisition is approximately $8.5 million to be funded by an unsecured loan arranged on commercial terms.