In a statement, the company said that it had agreed to a funding package that will allow it to begin mining once again. The package is comprised of loans from Ten Mining Pty Ltd up to AU$ 1.5 million. According to Aus Tin, the funding package will be split into three equal tranches of AU$ 500,000 each.
“We are delighted to have secured indicative terms for what represents the single largest investment into the Granville project, and one that will not only facilitate a resumption of operations, but also potentially expand the operation and through exploration seek to extend the mine life” – Chief Executive Officer Peter Williams
Aus Tin mothballed Granville in October after a strategic review highlighted that some Key Performance Indicators were being missed. This review followed the failure of several key pieces of equipment, including the excavator. Although the company found a smaller replacement, the loss of the mine truck soon after prevented the company from mining. At the time of the review, it restart costs totalled AU$ 500,000; the first tranche of the funding will for this. However, the company has decided not to repair the failed equipment. Instead, it plans to rent the new excavator and mine truck to prevent any future significant delays.
The September review also highlighted several upside options for Granville. The first, the use of additional pre-concentration before ball milling, could increase production rates. The company plans to modify the crushing circuit by adding a magnetic separator. This should increase the grade of material entering the processing plant. The process flow is currently undergoing trials.
The review also highlighted several regional exploration targets. The company has now identified several targets to focus on once the pending exploration license is granted. Aus Tin expects the license during Q1 next year. Aus Tin is also planning to extend its mining lease, allowing it to expand mining and processing operations at Granville. The second AU$ 500,000 tranche will fund both the upgraded processing flow and exploration work.
Finally, the Investor (Ten Mining), has proposed that Granville be the foundation asset for a proposed IPO of a Tasmanian focused mining and exploration company. To facilitate this, Aus Tin has moved the Granville asset to a wholly owned subsidiary Ten Star Mining Pty Ltd. The Investor will hold a 40% stake in Ten Star when the loans are converted to shares before the IPO. Upon de-merging Ten Star Mining from Aus Tin Mining, Ten Star will focus on operating Granville, while Aus Tin will move to develop Taronga and explore the Mt Cobalt prospect. The final AU$ 500,000 of the loan will be used to cover the corporate costs of the proposed IPO.