Australian metals mining firm MMG has announced the sale of its Century zinc mine in Queensland to Attila Resources.
Century is an open-cut zinc mine and ceased mining operations in August 2015, with its last ore processed in Q1 of 2016.
Recently, MMG signed an agreement with mine rehabilitation company Century Bull, through its subsidiary Century Miner Rehabilitation Project (CMRP). This agreement required CMRP to acquire all of Century assets and infrastructure.
The CMRP-MMG deal also required a A$34.5m contribution from MMG towards carrying out rehabilitation work in the future alongside undertaking maintenance activities.
Furthermore, a special purpose trust of A$12.1m has to be set-up to meet community and stakeholder obligations.
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MMG will also procure and stand behind the ongoing provisions of bank guarantees of A$193.7m for the benefit of Century Bull. This enables Century to meet its financial assurance obligations with the Queensland government.
Currently, Attila has signed a binding earn-in agreement with Century Bull to purchase 70% of the issued capital of CMRP in return for 30 million options, a 2% royalty, and funding of the project based on A$10m expenditure over three years.
It will have additional option to gain the remaining 30% in CMRP, reported Miningweekly.com.
The sale will help MMG focus on the development and operation of other mining assets.
This mine hosts indicated and inferred resource of around 2.5 million tonnes of zinc equivalent.
The resource is spread over the Silver King deposit, Century tailings and East Fault Block.
In addition, the project consists of a seven million tonne a year processing plant and mine site.