AuStar Gold Ltd. agreed to acquire the under administration Centennial Mining Ltd., which owns the A1 gold mine and the Maldon cyanide-in-leach processing plant in Victoria, Australia.
The company said Sept. 3 that its Woods Point gold processing plant, which has available capacity, is about 15 kilometers from the A1 mine, compared to about a 644-kilometer round trip to Centennial's processing facility near Maldon.
AuStar previously entered into discussions with Centennial's administrators for a possible takeover saying it received a number of recent unsolicited approaches from the latter's existing creditors.
The company will pay A$2.4 million cash toward the deed of company arrangement, or DOCA, to close the administration, and other parties to the DOCA will subscribe for about A$1.3 million.
The funds will be used by Centennial for the administration costs and to settle the claims of participating creditors in the DOCA.
AuStar will issue 24,982,946 shares to Centennial shareholders, representing 31.7% of its total shares on issue after the merger.
The completion of the acquisition is subject to a fundraising of at least A$4.4 million by AuStar at an issue price of at least 0.3 Australian cent per share.
The acquisition is scheduled to complete Nov. 30.
