AI assistant
MOUNT RIDLEY MINES LIMITED M&A Activity 2005
65372_rns_2005-01-04_ac9a8afb-2085-42e3-9dc9-2438f77f9a2e.pdf
M&A Activity
Open in viewerOpens in your device viewer
5 January 2005
The Manager Australian Stock Exchange Limited Level 8 Exchange Plaza 2 The Esplanade Perth WA 6000
PROPOSED ACQUISITION - Maher Mining Contractors Pty Ltd and Mt. Dimer Gold Mines Limited
Dear Sir/Madam
Further to the Company's announcement regarding above and in the interest of keeping the market fully informed, AXG submits the following information;
- Pro forma Balance Sheet for AXG Mining Limited following the proposed acquisition;
- Pro Forma capital structure for AXG Mining Limited following the proposed acquisition:
- Further details on Maher Mining including previous exploration and expenditure on the properties;
- Further information on Mt Dimer, including previous expenditure on the projects; and
- More detailed summary of resource statements
By Order of the Board P G Jermyn
AXG Mining Ltd ACN 092 304 964
1 Agnew Way Subiaco WA 6008 $Ph:$ 08 9382 4344 08 9382 4348 Fax: Email: [email protected] AXG Mining Limited ABN 93 092 304 964 Pro Forma balance sheet following acquisition March 2005
| Current Assets | \$ |
|---|---|
| Cash Assets | 1,158,491 |
| Other financial assets | 733,561 |
| Debtors | 97,286 |
| Total current assets | 1,989,337 |
| Non Current Assets | |
| Property plant and equipment | 17,093 |
| Exploration and tenements | 6,534,882 |
| Others investment in MDG | |
| Total Non Current assets | 6,551,975 |
| Total Assets | 8,541,313 |
| Current Liabilities | |
| Trade creditors | 154,994 |
| Other Liabilities | 30,691 |
| Provisions | 45,910 |
| Other Loans | 257,584 |
| Total Current liabilities | 489,179 |
| Non Current Liabilities | |
| Total Liabilities | 489,179 |
| Net Assets | 8,052,133 |
| Shareholders Equity | |
| Share Capital | 5,039,694 |
| New Shares issued on Acquisition | 4,429,770 |
| Retained Earnings | 1,417,331 |
| Total Shareholders Equity | 8,052,133 |
AXG Mining Limited ABN 93 092 304 964
Pro - Forma Capital Structure as at 31 March 2005 on the basis of;
the acquisition of 100% issued share capital of Maher Mining Contractors Pty Ltd; and
the acquisition of 100% of the issued share capital of Mt. Dimer Gold Mines Limited
| Total | Total | |||
|---|---|---|---|---|
| Number of shares |
Shareholders Capital Pre |
Number of shares |
Shareholders Capital Post |
|
| Post | ||||
| Details | Pre Acquisition | Acquisition $$^{\circ}\mathrm{s}$ |
Acquisition | Acquisition \$'s |
| Ordinary issued fully paid shares | 40,250,000 | 4,671,194.20 | 40,250,000 | 4,671,194.20 |
| 5,000,000 1 1,000,000.00 | ||||
| 15,248,853 $^{2}$ 3,229,770.00 | ||||
| Total Ordinary shares | 40,250,000 | 60,498,853 | ||
| Options to subscribe to Fully paid ordinary | 40,250,000 | 368,500.00 | 40,250,000 | 368,500.00 |
| shares at an exercise price of 20 cents and an expiry date of 31 August 2010 |
10,000,000 $^{2}$ | 200,000.00 | ||
| Total Options | 40,250,000 | 50,250,000 | ||
| 5,039,694.20 | 9,469,464.20 | |||
| 1 Maher Mining Contractors Ptv Ltd |
2 Mt. Dimer Gold Mines Limited
Maher Mining Contractors Pty Ltd
Background
Maher Mining Contractors Pty Ltd ("MMC") was formed in Kalgoorlie to undertake small scale underground mining operations and provide general contracting services to the mining industry. In early 2001 MMC acquired the Mt Dimer Gold Project from Tectonic Resources NL. MMC initially commenced a small scale underground mining operation in the floor of the previously mined Fordo Open Cut Pit. Ore was carted to Coolgardie for treatment and mining was suspended in 2002.
MMC also undertook an internal review of the project to determine further potential and identified a number of areas that it considered had potential for further mining. These areas were both open cut and underground locations and MMC decided that the project was beyond the resources of MMC in both capital requirements and scale.
In October 2003 reached agreement to vend the Mt Dimer Project into a new float called Mt Dimer Gold Mines Limited. The float did not proceed and MMC retained the project until it entered into the current Heads of Agreement with AXG Mining Limited ("AXG").
Assets
The assets of MMC post the AXG acquisition will comprise the Mt Dimer Gold Project and cash on deposit of \$255,000. A tenement schedule for the Mt Dimer Gold Project is included below.
Past Exploration Activity and Expenditure
The Mt Dimer Project was actively mined by various groups between mid 1990 and April 1997, and produced 639,790 tonnes at 6.48q/t Au for more than 133,000 ounces of gold and 183,000 ounces of silver. This production came from 6 open pits, and 4 underground mines. Access to the underground workings was via a 1.5km long decline driven from the base of the LO1 open pit.
The plant was decommissioned in April 1997 however considerable infrastructure remains on site.
| Deposit | Mined Strike | Width | Depth Mined | Tonnes | Grade (g/t |
|---|---|---|---|---|---|
| Length | Au) | ||||
| LO1 | 75-175m | $1-5m$ | 200m | 57,250(p) | 7.37 |
| 108,457(u) | 8.09 | ||||
| Boobook | 50m | 1-2m | $50 - 70m$ | $4,275$ (u) | 9.56 |
| LO 2 | 80-200m | 1-8m | 200m | 47,111(p) | 6.24 |
| $70,261$ (u) | 9.69 | ||||
| LO 2 A | 80-200 | $1-5m$ | 200m | 44,262(u) | 8.72 |
| LO 3 | 190m | 1-4m | 61 m | 13,476(p) | 4.46 |
| 77-90m | 9,138(u) | 6.57 | |||
| LO 4 | 13 m | 1.2m | $1,810$ (u) | 3.04 | |
| Anomaly 2 | 50 m | $1-3m$ | 6,700 | 2.00 | |
| Laterite | |||||
| Golden | 100m | 1-8m | 63m | 67,000 | 3.40 |
| Slipper | |||||
| Frodo | 75m | 1-7m | 40 in | 15,155 | 11.32 |
| Karli West | 55m | 1-6m | 40 m | 10,704 | 6.44 |
| 3 LO1, 2 |
3m | 100,000 | 1.70 | ||
| Laterite | |||||
| (estimated) | |||||
Mt Dimer Project Previous Mining Summary
Note (p) means open pit production, (u) means underground production.
Previous exploration, development and mining expenditure totalled approximately \$50 million. This figure has been calculated from reports and data supplied to MMC by previous owners of the Mt Dimer Project.
A low impact underground mining operation below the Frodo open pit was carried out by MMC between mid 2001 and early 2002.
Resource Statement (JORC Compliant)
Mt Dimer Gold Project Resource Statement December 2004
| Zone | Tonnes | Grade | Grams | Ounces | JORC Category |
|---|---|---|---|---|---|
| $L01$ U/G | 4,280 | 7.901 | 33,812 | 1,087 | Measured Resource |
| $LO1$ U/G | 80,000 | 6.50 | 520,000 | 16,720 | Inferred Resource |
| L02/2A U/G | 95,000 | 6.50 | 617,500 | 19,855 | Inferred Resource |
| L03 U/G | 4,530 | 6.69 | 30,306 | 974 | Measured Resource |
| $L04$ U/G | 16,000 | 6.50 | 104,000 | 3,344 | Inferred Resource |
| Karli West Pit | 1,020 | 8.55 | 8,721 | 280 | Measured Resource |
| Karli West U/G | 12,000 | 6.50 | 78,000 | 2,508 | Inferred Resource |
| Golden Slipper U/G | 52,800 | 6.50 | 343,200 | 11,035 | Inferred Resource |
| Golden Slipper Sth Pit | 39,850 | 4.85 | 193,273 | 6,215 | Measured Resource |
| Lightning Pit | 10,000 | 3.25 | 32,500 | 1,045 | Indicated Resource |
| Lightning U/G | 10,100 | 11.73 | 118,473 | 3,809 | Inferred Resource |
| Anomaly 2 Pit | 12,480 | 3.82 | 47,674 | 1,533 | Inferred Resource |
| Anomaly 2 Laterite | 12,430 | 1.70 | 21,131 | 679 | Measured Resource |
| Silverwing Laterite | 17,780 | 1.34 | 23,825 | 766 | Measured Resource |
| EM 1 Laterite | 8,960 | 1.33 | 11,917 | 383 | Measured Resource |
| lTotal. | 377.230 | 5.79 2.184.331 | 70.236 |
| Tonnes | Grade | Grams | Ounces | |
|---|---|---|---|---|
| Total Inferred Resources | 278,380 | 6.571 | 1,828,847 | 58,805 |
| Total Indicated Resources | 10.000 | 3.25 | 32,500 | 1.045 |
| Total Measured Resources | 88,850 | 3.64 | 322,984 | 10,385 |
| lTotal | 377,230 | 5.79 | 2,184,331 | 70,236 |
Financial Performance
The past financial performance of MMC is not considered relevant as the contracting business operated by MMC and those assets will be retained by the vendors of MMC as part of this transaction.
Tenement Schedule
| Tenement | Size: | Holder |
|---|---|---|
| M77/427 | 664.6Ha | Maher Mining Contractors Pty Ltd. |
| M77/428 | 624.65Ha | Maher Mining Contractors Pty Ltd |
| L77/83 | 2.4644Ha | Maher Mining Contractors Pty Ltd. |
| L77/135 | 62Ha | Maher Mining Contractors Pty Ltd |
| L77/147 | 7.8771ha | Maher Mining Contractors Pty Ltd |
The mineral resources detailed here are based on information compiled and reported upon by Mathew Sullivan, who is a Member of the Australasian Institute of Mining and Metallurgy, and has more than five years experience in the field of activity being reported upon.
Mt Dimer Gold Mines Limited
Background
Mt Dimer Gold Mines Limited ("MDG") was incorporated in September 2003 to acquire and develop mineral projects prospective for gold and other minerals. MDG issued a prospectus in November 2003 to raise up to \$5.0 million and list on the ASX. The prospectus was withdrawn in August 2004 and the listing did not proceed.
Assets
- MDG has an option to acquire the Corinthian Gold Mine. The option requires the drilling of four exploration holes below the old underground workings within 12 months. The option can be exercised within the 12 months by the commencement of mining operations with a rovalty of \$2.50 per dry tonne payable quarterly in arrears. A minimum payment of \$25,000 per quarter is required. The option can be extended for a further 12 months by the payment of \$25,000 and the drilling of a further 4 exploration holes to depths of approximately 200m.
- MDG has entered into agreements to purchase the following projects: $\bullet$
Pioneer (80% interest)
Ubini (80% interest)
Brown Lake (80% interest)
These acquisitions will be completed upon the payment of \$60,000 and the issue of 600,000 shares in AXG Mining Ltd.
MDG has an option to acquire the Mt Dimer North Project for the $\bullet$ payment of \$30,000. This project adjoins the northern boundary of the Mt Dimer Gold Project.
Previous Exploration & Expenditure
Corinthian
Prior to 1964 an underground operation operated by Western Consolidated mined 298,278 tonnes at a recovered grade of 6.29g/t Au. Three underground levels were established off an incline shaft. In the late 1980s Broken Hill Metals mined a small open pit which extracted 26,626 tonnes at a recovered grade of 1.93g/t Au. Jordan Mining have re-established the underground workings and have mined several 500 tonne parcels grading 10 to 30g/t Au. Subsequently Sons of Gwalia (SOG) held an option to explore the top 100 vertical metres for open cut ore. Their drilling encountered a second parallel lode that had not been previously identified. As the main potential at Corinthian occurs below 100m depth, SOG withdrew from the option.
The current resource identified from existing drilling is listed in the attached table.
The Resource at Corinthian contains a high-grade (+5g/t Au) core which has an indicated resource of 84,859 tonnes grading 5.86g/t Au. This resource remains open at depth and is considered to represent the greatest potential within the project. This is the basis of the underground potential referred to in the previous announcement. To date, more than \$1,000,000 has been spent on exploration and development at Corinthian.
Pioneer
Pioneer was acquired by the current JV partners in the early 1990s, and has been optioned to WMC, Delta Gold and Bullion Minerals in the past. These explorers have carried out soil sampling, aircore, RC and diamond drilling on several gold and nickel prospects, all of which are at early stages of exploration. The best defined to date is the Spongelite Prospect which has received several drilling programmes and contains the resource identified to date. To date, more than \$700,000 has been spent on exploration at Pioneer.
Brown Lake
Brown Lake was acquired by the current JV partners in the early 1990s, and was briefly optioned to Delta Gold prior to their merger with Goldfields. Approximately \$200,000 has been spent on exploration at Brown Lake to date
Limited soil sampling, and follow up aircore drilling has been completed on one prospect which has returned encouraging gold assays. Other targets have vet to be tested.
Ubini
Ubini was acquired by the current JV partners in the early 1990s. Work completed to date has consisted of compilation of all previous data. This has highlighted several gold prospects, one of which has had wide spaced drilling. This mineralisation shows consistency and a small inferred resource has been estimated. Other targets have yet to be tested.
Total exploration expenditure at Ubini to date is approximately \$75,000
Mt Dimer North
The Mt Dimer North area has been explored by several mining companies since the late 1980s. Previous explorers have included Placer Exploration, Burmine and Sons of Gwalia. Reconnaissance exploration drilling to date has outlined several highly prospective mineralised zones, one of which, Woodcutters, has an inferred resource (refer Resource Statement). To date, some \$380,000 is estimated to have been spent on the Mt Dimer North Project.
Tenement Schedule
| Project | Tenement | Area | Holder |
|---|---|---|---|
| Brown Lake | P15/3883 | 180.5 ha | T. Stehn, A. Stehn, H. Carmody |
| P15/3884 | 160.0 ha | T. Stehn, A. Stehn, H. Carmody | |
| P15/3885 | 165.0ha | T. Stehn, A. Stehn, H. Carmody | |
| P15/3886 | 142.0ha | T. Stehn, A. Stehn, H. Carmody | |
| MLA15/1342 | $647$ ha | ||
| P15/3887 | 99.0ha | T. Stehn, A. Stehn, H. Carmody | |
| MLA15/1344 | 99.0ha | ||
| Pioneer | E63/337 | 3 blocks | H. Carmody, N. Gill, T. Stehn |
| E63/733 | 5 blocks | H. Carmody, N. Gill, A. Stehn | |
| M63/329 | 67.51ha | H. Carmody, N. Gill, T. Stehn | |
| M63/368 | 383.0ha | H. Carmody, N. Gill, T. Stehn | |
| MLA63/394 | 882.0ha | H. Carmody, N. Gill, T. Stehn | |
| MLA63/567 | $164$ ha | H. Carmody, N. Gill, A. Stehn | |
| Ubini | P15/3204 | 100.0 ha | A. Stehn |
| MLA15/994 | 100.0ha | A. Stehn | |
| P15/4328 | 174.0 ha | Bullabulling Pty Ltd | |
| P15/4329 | 141.0ha | Bullabulling Pty Ltd | |
| MLA15/1482 | 322ha | Bullabulling Pty Ltd | |
| Corinthian | ML 77/677 | 12.15Ha | Alan Frederick Jordan & Carolyn Joan McCusker |
| Mt Dimer Nth | MLA77/957 | 54 Ha | Tectonic Resources Ltd |
| (Woodcutters) | MLA77/958 | 52 Ha | Tectonic Resources Ltd |
| MLA77/964 | 854 Ha | Tectonic Resources Ltd | |
| MLA77/965 | 634 Ha | Tectonic Resources Ltd |
Resource Statements
Resource Statement December 2004
| Zone | Tonnes | S rade | S crams | Ounces | JORC Category |
|---|---|---|---|---|---|
| Pioneer | 220.008 | 1.87 | 411.652 | 13.236 | Inferred Resource |
| Corinthian | .004.004 | 2.19 | 2.198.769 | 70.700 | Indicated Resource |
| Mt Dimer North | 170.000 | 4.05 | 689.105 | 22.158 | Inferred Resource |
| Total | 1,394,012 | 2.37 | 3.299.526 | 106,094 |
| Tonnes | lGrade | Grams | Ounces | |
|---|---|---|---|---|
| Total Inferred Resources | 390.008 | 2.82 | 1.100.757 | 35,394 |
| Total Indicated Resources | 1.004.004 | 2.19 | 2.198.769 | 70,700 |
Financial Performance
MDG incurred a loss of \$41,166 for the period ended 31st December 2004.
All Other Projects
The mineral resources detailed here are based on information compiled and reported upon by Mathew Sullivan, who is a Member of the Australasian Institute of Mining and Metallurgy, and has more than five years experience in the field of activity being reported upon.
Corinthian Gold Mine
The mineral resources detailed here are based on information compiled and reported upon by Leigh Jordan, who is a Member of the Australasian Institute of Mining and Metallurgy, and has more than five years experience in the field of activity being reported upon.