Hillgrove mine set for reboot
A WA consortium plans to test volatile equity markets and demand for rare metals by seeking up to $80 million in a refloat of the Hillgrove antimony-gold mine in central New South Wales.
Court Resources Pty Ltd, which is in the process of changing its name to Ancoa, has announced agreement to buy Hillgrove from Straits Resources for $40 million in cash and shares.
The purchase is conditional on Ancoa raising sufficient funds through a proposed initial public offering lead managed by Patersons Securities.
The group aims to pull Hillgrove out of care and maintenance and take advantage of a recovery in the price of antimony - and to a lesser extent gold - and tightening supplies of the metal, which is used in fire retardants, in semiconductors and as a strengthener in alloys.
Court is headed by business associates Greg Steemson and Peter Thomas and is supported by about a dozen investors.
Mr Steemson, a geologist who cut his teeth as a director with Fortescue Metals' predecessor, Allied Gold, and copper star Sandfire Resources in its early days, said Ancoa would offer "a fairly unique opportunity".
"This project is basically ready to be put back into production," he said.
"The demand-supply dynamics are good, from a risk point of view, it's a low-risk entry (into antimony) and provided we can get the capital raising across the line, I think it will be quite a nice project.
"Antimony prices have hit record highs this year, driven by rising demand and tight supply as the world's biggest producer, China, which accounts for about 85 per cent of global output, continues to close illegal or polluting mines."
More than $1 billion of gold and antimony at today's prices has been taken out of the Hillgrove field since the 1870s.
The flagship mine has a chequered history, including the failure of two owners, VAM and Hillgrove Gold, in the last 20 years.
Straits picked up the project in 2004, embarking on an aggressive development to get the mine reopened in 2008.
However, it produced for less than a year before Straits closed the doors because of technical problems with the new processing plant.
Mr Steemson said Ancoa's plan for the restart including a re-engineering of the plant and a renewed focus on exploration to increase reserves. Instead of producing the metal on-site, the company will produce two concentrates to ultimately generate 4500 tonnes of antimony and 25,000 ounces of gold a year.
Court has already conducted initial marketing enquiries with potential customers overseas.
Ancoa would earmark $20 million of the raising to fund the purchase - the balance of the $40 million would be shares - and a further $25 million to $28 million to get Hillgrove back into production.
The company intends to release its prospectus in early October, with the first production from Hillgrove pencilled in for late-2012.
The Patersons raising will not be underwritten.
