Merger and Acquisition activity

THE BOURSE WHISPERER: With a bit more confidence creeping into the market there seems to be some increasing activity in the M&A space.

Mungana firms up North Queensland zinc strategy

Mungana Goldmines (ASX: MUX) is set to move ahead with its North Queensland zinc strategy after gainin shareholder approval for its $15 million acquisition of a portfolio of base metal assets, from the Liquidators of Kagara.

The acquisition, which is expected to be completed by the end of July, puts Mungana on track to become a new player in the Australian zinc industry over the next few years.

The portfolio includes one of Australia’s highest grade undeveloped zinc deposits, the King Vol project, which includes a JORC 2004 Indicated Resource of 899,000 tonnes grading 16 per cent zinc, 0.9 per cent copper, 0.9 per cent lead and 42g/t silver for 144,000 tonnes of contained zinc and an Inferred Resource of 1.86 million tonnes grading 9.9 per cent zinc, 0.6 per cent copper, 0.4 per cent lead and 24g/t silver for 184,000 tonnes of zinc.

“This is a transformational deal for Mungana, positioning us with outstanding, high-grade, high quality assets in the zinc-copper space, with the added bonus of having a large porphyry gold-copper asset at Red Dome,” Mungana Goldmines chairman Joe Treacy said.

“We are looking forward to hitting the ground running, with exploration programs set to commence at King Vol within four to six weeks.

“Our objective is to advance this deposit towards development as quickly as we can to take advantage of the outstanding market fundamentals for zinc.”

Chalice acquires the Dubenski gold deposit

Chalice Gold Mines (ASX: CHN) has acquired the Dubenski gold deposit in Ontario Canada for C$700,000 by renegotiating an existing option agreement.
 
The acquisition gives Chalice 100 per cent ownership of the gold deposit located within 10km of the Cameron gold project.

The previous option agreement with the vendor included an exercise price of C$3,500,000 (exercisable on or before 30 April 2017) plus a 2.5 per cent Net Smelter Royalty.

The Dubenski deposit contains an Indicated Resource of 806,000 tonnes at 2.28g/t gold for 59,000 ounces and an Inferred Resource of 392,000 tonnes at 1.44g/t gold for 18,200 ounces at a cut-off grade of 1g/t to a depth of 150m below surface.

Dubenski is located on Chalice’s West Cedartree project, less than 10km to the west of the Cameron gold deposit and provides a potentially open pittable source of material to the existing Resources at the Cameron project.

The key terms and conditions of the acquisition include:

A consideration payment of C$700,000; and

An additional payment on all gold production mined in excess of 70,000 ounces (being US$13 per ounce where the gold price is less than or equal to US$1,500 per ounce and US$16 per ounce where the gold price is greater than US$1,500 per ounce).

“We are very pleased to have renegotiated the acquisition of the Dubenski deposit on favourable terms,” Chalice Gold Mines managing director Bill Bent said.

“Dubenski will make an important contribution to our goal of continuing to grow and enhance the Cameron gold project by securing additional high-grade ounces in the region both through exploration success and acquisition.”