Kagara Mining to sell North Queensland assets

16 December 2012 (Last Updated December 16th, 2012 18:30)

Kagara and Einasleigh Mining has signed sale agreements for the divestment of its assets in the North Queensland Central region to Snow Peak Mining.

Kagara and Einasleigh Mining has signed sale agreements for the divestment of its assets in the North Queensland Central region to Snow Peak Mining.

The Australian mining company has agreed to sell its portfolio of copper, zinc-lead and nickel operations in North Queensland for a consideration of $40m, including $10.7m in environmental bonds.

The Group's assets across North Queensland lie within three regional centres, including, but not limited to, the northern, central and southern regions.

The assets, which include mining resources and processing plants, were put up for sale in October 2012 via a competitive bid process.

Snow Peak Mining, a part of UK-based Consolidated Tin Mines, will purchase the portfolio including the resources and processing plant at Mt Garnet; the Balcooma and Baal Gammon mining areas and the Einasleigh and Maitland exploration projects.

The company has paid a $4m deposit pending completion. Following the sale, the group will continue to consider and review all available options to restructure the group.

Proceeds from the sale would primarily enable the group to eliminate debt, trading costs and administration expenses, while the remaining funds would serve as working capital.

The transaction is expected to complete before February 2013 and the group's administrators are also considering offers on other group assets, with Taylor Woodings acting as the accounting firm.