Aurelia Mines has secured a deal to acquire the Peak Mines operations in New South Wales from Toronto-listed New Gold for $US58 million ($76.7 million).
The agreement will significantly increase Aurelia’s precious and base metals production by providing it with two operating mines – Peak and Hera – and processing facilities close to infrastructure
Aurelia will also acquire the Nymagee and Great Cobar development projects, an expansion of its exploration acreage and an increase in mineral resources and reserves.
Peak produced around 107,400 ounces of gold and 15 million pounds of copper in the 2016 calendar year.
With the addition of Peak, Aurelia is targeting production of between 100,000-120,000 ounces of gold at costs of around $1000 an ounce in the 2019 financial year.
Aurelia managing director Jim Simpson described the deal as a transformative acquisition for the company, delivering a step-change in its production, cash generation and reserves.
“In the process, it is a major step in realising our strategy of creating a leading gold and base metals production company in the Cobar district,” Simpson said.
“Peak is an ideal growth asset for Aurelia, seeing us transform from a single mine company, to a business with two operating mines, two complementary processing facilities, two sources of cash flow from a diversified commodity mix and identified growth opportunities and exploration targets.”
“By applying the operating expertise gained at Hera, together with my five years as general manager of Peak, Aurelia has identified several avenues to improve operating costs and production efficiencies at the Peak operations.”
Aurelia plans to undertake a $70 million share placement to institutional investors to support the acquisition. The company expects to complete the deal in first quarter 2018.
The Peak assets are around eight kilometres from Cobar in central western NSW.