UPDATE 1.15pm: Shares in Metaliko Resources soared after the tiddler announced late yesterday it had bought the historic Bronzewing gold mine in the Goldfields.
Shares in the company surged 1.4 cents, or 140 per cent, to close at 2.4 cents after hitting an earlier peak of 2.5 cents.
The Michael Ruane-chaired Metaliko Minerals announced late yesterday it had struck a deal with the administrators of Navigator Resources to buy the failed mine for $4.8 million.
Metaliko said it would launch a rights issue for about $6.9 million to cover the purchase price and add working capital, with the acquisition not likely to close until the end of February.
The Metaliko agreement replaces an October deal to sell the failed mine to Cobra Mining, an unlisted company associated with Dr Ruane.
Crunched by the falling gold price, Metaliko last year struggled to win market traction for exploration and development of its Anthill and Googarrie Lady gold projects and told shareholders it was on the hunt for new projects.
But Dr Ruane was forced to admit at Metaliko's annual meeting in November it had thus far been unsuccessful in its search for a project "attractive enough to ensure the raising of capital at an acceptable price".
Although the Bronzewing acquisition price is $4.8 million, the deal will deliver $11.8 million to Navigator's administrators because of an agreement that would see Metaliko opt in to the State Government's Mining Rehabilitation Fund and return $7.1 million in environmental bonds to the administrators.
In a move likely to raise new questions about the operation of the MRF, Metaliko said it planned to swap the bonds for a far lower annual payment into the fund.
Although the scheme has freed up environmental bond money for explorers, critics say until it is far bigger the scheme has effectively transferred the industry's rehabilitation liability back onto the taxpayer.
Pitcher Partners' Bryan Hughes took control of Bronzewing two years ago after Navigator gave up its four-year struggle to make the mine pay, owing an estimated $40 million to creditors.