Hanking Australia Investment Pty Ltd, a subsidiary of China Hanking Holdings Limited on 19 September made a non-binding indicative cash offer to acquire the Coolgardie Gold Project in Western Australia from Focus Minerals Limited (FML).
The Coolgardie Gold Project includes approximately 235 km2 mining and exploration tenements and a gold processing plant with an annual processing capacity of 1.2 million tons of ore. The project was in gold production until August 2013 when it was put into care and maintenance. The tenements of the project contain approximately 2.1 million ounces of gold in Australasian Joint Ore Reserves Committee resources, with both mineable open pit and underground deposits.
The Coolgardie Gold Project is adjacent to Hanking Australia’s McPherson’s Gold project which has been fully permitted for mining.
The total consideration in the non-binding indicative cash offer was AUD56 to 65 million, with the upfront payment of AUD12 million and the balance to be paid in tranches over 3.5 years from the completion of acquisition. The Hanking offer is subject to the completion of due diligence by Hanking and the negotiation of binding transaction documents.
In response, on 25 September, FML rejected the offer on the grounds that a proposal from Horizon Minerals Ltd is substantially more advanced (including due diligence being completed) and currently has greater execution certainty.
On 6 September 2019, FML announced that Horizon had made a non-binding proposal of A$55 million, comprising A$12 million in fully paid ordinary shares and A$43 million in cash, which is payable in tranches.
“In the absence of a superior proposal, Focus will continue to engage with Horizon in relation to its previously announced (improved) proposal to acquire the Coolgardie Gold Project,” FML said.