AuStar Gold has entered into discussions with the administrators of Centennial Mining to assess proposing a deed of company arrangement with its creditors.
Negotiations with Korda Mentha, the administrators of Centennial Mining, will result in further announcements in the coming days, with AuStar urging existing creditors of Centennial not to take immediate actions until further updates are given.
Centennial’s main project is the A1 gold mine in Eastern Victoria, which is the second largest gold producer in the Woods Point-Walhalla goldfield.
AuStar already holds significant exploration assets surrounding the A1 mine, which encompasses the bulk of the highly prospective regional corridor in which its Morning Star and Rose of Denmark mines are situated.
Executive chairman Frank Terranova said the company’s increased focus on local mining brings the potential for “sustained growth” in the Victorian region.
“AuStar Gold has publicly advised that regional consolidation is a logical component of the company’s overall growth strategy,” he said.
“Bringing these assets together has the potential to accelerate growth for all shareholders, as well as deliver economic benefits to the region.”
The company has been ramping up gold production at its Rose of Denmark and Morning Star mines, reporting improvements throughout April in recoveries, dore production and gold sales.
It announced that recent diamond drilling at Rose of Denmark was completed successfully with diamond drill rigs now being mobilised to Morning Star.
The company is expecting to provide further updates over the coming period.