Mun­gana boss not moved by hard sell

Townsville Bulletin - - NEWS - TONY RAGGATT tony. raggatt@ news. com. au

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.

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