ASX-listed Aus Tin Mining has signed a heads of agreement to acquire McDermott Mining and its assets, including the Granville tin project mine near Zeehan, Tasmania, for $A1.3 million. This is subject to the outcome of a 60 day exclusivity period for the undertaking of technical, financial and legal due diligence. The agreement also comprises vendor finance, a 2% Net Smelter Royalty and assumption or repayment of an existing working capital facility.
The Granville tin project has operated sporadically since 1984, producing tin concentrate of over 70% Sn, but is currently on care and maintenance. The project comprises two mining leases including the Granville East open pit, which is a primary banded magnetite rich deposit carrying varying quantities of tin, and the Central Big H and Deep Lead prospects, both alluvial deposits. Also included in the acquisition is the Twelve Mine Creek processing plant, which is currently approved for 1,000 tpa of ore throughput but is undergoing an expansion to increase capacity to 50,000 tpa. Most recent production saw tin recoveries of 80%, producing 500 kg of tin per day.
The intention is to recommence mining as soon as possible at the Granville East open pit. A 15,000 tonne ore stockpile with an average grade of 1.88% Sn that remains on site will be processed to generate cash flow. This revenue will be used to develop a resource target estimate at the open pit, continue expansion of the processing plant and contribute to the Stage 1 development of Aus Tin’s Taronga Tin Project in New South Wales. The company has no plans to develop the alluvial prospects but they remain potential targets for future exploration.
Please find the ASX announcement here