Mungana boss not moved by hard sell
THE boss of a company developing highly prized zinc assets near Chillagoe in North Queensland, Tony James of Mungana Goldmines Ltd, says people can make up their own minds about a corporate raider pressuring its major shareholders to sell out.
The raider, the US private equitybacked Auctus Chillagoe Pty Ltd, has run full page ads in newspapers including the Townsville Bulletin this week calling on creditors of collapsed mining companies Kagara Ltd and Mungana Ltd to “take action, make contact and request” liquidators FTI Consulting to accept Auctus’ takeover offer.
The liquidators, through their control of Kagara and Mungana, hold a 72 per cent interest in Mungana Goldmines.
Mungana Goldmines is the last key assets in the Kagara group, which collapsed in 2012 owing unsecured creditors about $ 100 million.
“This is obviously a last- minute attempt by Auctus to put pressure on FTI,” Mr James said.
“Doing it through the creditors is quite interesting.”
It follows comments by federal Kennedy MP Bob Katter earlier this month that FTI Consulting was “not giving due consideration” to offers for the assets and reminding them about the “little people” who lost jobs, businesses and “6- 7 figure sums” in the collapse.
While some creditors have been paid, many are yet to receive a cent.
FTI liquidator Michael Ryan last month rejected Auctus’ 13.5¢- a- share offer for Mungana Goldmines, saying it did not represent fair market value when an independent expert had valued the shares at between 24¢ and 31¢.
Auctus has since increased its offer to 17¢.
Mungana Goldmines released a scoping study yesterday showing its King Vol zinc, copper, lead and silver project had an indicative life of mine revenue of $ 349 million. The company intends to complete a feasibility study and start production at King Vol in 2017.
Mr James said they had the skills and knowledge to develop an “exciting” project.
He said forecasts of an increase in zinc prices because of a structural shortage in supply was part of the “backdrop for what’s going on”.
“This is one of the few projects that is predicted to come on line for the high prices,” Mr James said.
The scoping study says King Vol will have an estimated average annual production of 35,900 tonnes of zinc, 840 tonnes of copper, 910 tonnes of lead and 185,000 ounces of silver in concentrate after ramp- up.