Australian specialty metals producer ATC Alloys Limited (ATA) has announced the signing of a binding head of agreement to acquire the Wolfram Camp Mine in Queensland from Almonty Industries.
Located approximately 130km west of Cairns, the Wolfram Camp mine has fully-permitted open-pit mining operation, high quality infrastructure and a 4-year mine-life with substantial exploration potential.
The mine achieved commercial production in November 2013 and produced approximately 40,000mtu of tungsten oxide in 2015.
Production at the Wolfram Camp Mine is currently on hold – pending the completion of the optimisation of the milling circuit – and is expected to resume by the end of this year.
According to the ASX release by ATA, the consideration for the acquisition is 120 million fully paid ordinary shares in ATA at a deemed issue price of $0.05 per share, which values the mine at A$6 million.
The transaction is subject to satisfying several conditions, including:
- Completion of due diligence by ATA and Almonty.
- Finalisation of legal documentation.
- ATA shareholder approval.
- ATA completing an equity raising of at least $6 million.
- Third party lender approvals.
- Other statutory, regulatory and other approvals that may be required by the parties.
Commenting on the proposed acquisition, ATA Chairman Patrick Burke said it would diversify the company’s operating base and capture synergies across the supply chain.
“The proposed acquisition of Wolfram Camp is clearly aligned with our strategic goal of establishing a diversified specialty metals company. Wolfram Camp is a high-quality asset with near-term production potential and exposure to improving tungsten prices,” he said.
“The combination of the Company’s ferrotungsten plant in Vietnam with the Wolfram Camp would create a significant tungsten mining and down-stream processing business. I look forward to working with Almonty as a strategic partner and drawing on their depth of experience in tungsten operations, marketing and off-take.”
Almonty President and CEO Lewis Black said the acquisition will see the company become the largest shareholder in ATA with an ownership interest of approximately 53%.
“Almonty’s majority ownership in ATA gives both our shareholders exposure to an expanded tungsten value chain that should enable ATA to attract enhanced multiples awarded to specialty metal producers,” Mr Black said.
“This transaction is a continuation of Almonty’s strategy of consolidating and combines the largest Western Tungsten reserve base of Almonty and the largest Western Ferro Tungsten plant of ATA to maximise value for both our shareholders.”