North Queensland assets sold in Kagara mine deal
A HONG Kong-based investment company has signed a $40 million deal to take over North Queensland mining projects shelved by battling gold giant Kagara.
Snow Peak Mining yesterday announced it had entered into an agreement to purchase Kagara's North Queensland assets, which include a resources and processing plant at Mt Garnet and permits for sites on the outer Tableland.
The sale, which is expected to be finalised by late next month, will help wipe off Kagara's secured debt, trading costs and expenses incurred since the miner went into voluntary administration earlier this year.
Administrator Michael Ryan, of Taylor Woodings, said the balance would be retained for working capital.
Snow Peak Mining, an investment group based in Hong Kong, last year invested $1.6 million in a tin project at Mt Garnet operated by Cairns company Consolidated Tin Mines.
In its purchase of Kagara's assets, it will assume $10.7 million in environmental bonds.
Kagara went into voluntary administration in April owing $95 million to more than 830 creditors.
The base metals miner blamed plunging zinc and copper prices, rising production costs and a strong Australian dollar for its poor financial performance.
Its administrators have slowly scaled that debt back by selling off some of the company's $400 million worth of assets, including the Balcooma and Baal Gammon mining areas and the Einasleigh and Maitland exploration projects.
About 250 workers lost their jobs but the Snow Peak Mining purchase is expected to salvage about 20 current positions.
"The administrators are pleased to formally agree the sale of the group's central region projects and wish to thank the Kagara staff, a number of whom are expected to be offered employment by the purchaser, for their assistance through this part of the process," Mr Ryan said.
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