Darques To Produce 55,000 oOz By 2021
Aurelia Metals Limited (ASX: AMI) has agreed to acquire 100% of the Dargues Gold Mine and regional exploration tenements by way of an acquisition of all of the shares in Dargues Gold Mine Pty Ltd from Diversified Minerals Pty Ltd.
Dargues is located in south-eastern NSW and delivered its first shipment of gold concentrate in June 2020. The operation consists of an underground mine and newly constructed processing plant which is expected to ramp up to nameplate capacity of approximately 355,000 tpa by mid-2021.
Dargues produces a clean gold concentrate with forecast life-of-mine (LOM) average gold production of 45 – 55,000 oz p.a. at an average All- In-Sustaining-Cost (AISC) of A$1,150 to A$1,350/oz over five years2.
The Acquisition is consistent with Aurelia’s strategic objectives and is accretive on a Net Asset Value (NAV) per share basis. Post-acquisition, Aurelia’s focus will be to continue the production ramp-up, implement its identified mine design and process circuit improvements and extend mine life and annual production rate (subject to permitting approvals). An extensional and infill resource drilling programme will be prioritised, with Stage 1 completion targeted by mid-2021.
Aurelia will acquire Dargues on a debt-free and hedge-free basis, with transaction completion expected to occur by late 2020 or early 2021, subject to and immediately following NSW Ministerial consent and satisfaction of other customary conditions for a transaction of this nature.
Aurelia has agreed to pay total consideration to Diversified Minerals of up to A$205 million for the Acquisition consisting of A$176 million in cash and A$24 million in Aurelia ordinary shares at A$0.43/share.
The agreement includes a contingent payment up to a maximum of A$5million in Aurelia ordinary shares based on the addition of incremental JORC compliant Mineral Resources discovered at Dargues up to 30 June 2022.
Managing Director and CEO, Dan Clifford, said the acquisition is consistent with Aurelia’s strategic goal of becoming a mid-cap gold focused producer and provides significant benefits for the company.
“The acquisition of Dargues is a landmark transaction for Aurelia,” Mr Clifford said.
“We have articulated a strategy for growing shareholder value and we believe this move is entirely aligned with that strategy. The acquisition diversifies our production base while also increasing Aurelia’s overall production weighting further towards gold.
“Dargues’ NSW domicile also offers clear synergies to our business which we plan to capitalise on rapidly. Critically, we believe the existing Dargues resource offers substantial potential upside with further extensional target drilling.
“Aurelia’s demonstrated ability in exploration, driven by its strong geological IP, is expected to be a key value driver in this regard. Accelerated drilling is a priority post acquisition completion.
“Finally, we plan to apply our strong ESG values and framework to Dargues in pursuit of safe, sustainable operations under our stewardship. In short, we believe this transaction ticks all the boxes for Aurelia shareholders and offers excellent short and long-term value growth potential.”
