Big names in BNM mire
A number of big-name players in WA’s gold mining scene have been entangled in a Murchison project which has hit financial troubles.
Privately owned BNM Australia Group — backed by US metal merchant Auramet Trading — has been leasing Silver Lake Resources’ Tuckabianna mill to process tailings in the Murchison since January.
Investor presentations obtained by the Kalgoorlie Miner show BNM was projecting free cash flows of $44.8 million over the 31-month mill lease.
But sources say creditors are chasing payment of debts worth $6 million to $8 million, and officials from New York-based Auramet are working to resolve the situation.
Auramet’s Perth representative Deborah Bakker declined to comment, citing confidentiality agreements.
But Auramet is believed to be considering a deal to sell BNM’s debt and “step-in rights” to preserve the contracts with third parties without involving external administrators.
It could all add up to a short but ultimately eventful foray into the WA gold scene for BNM, which was registered with the Australian Securities and Investments Commission last September and has also done deals with ASX-listed Metals X and Doray Minerals.
Perth-based BNM — co-founded by managing director Cameron McLeod and technical director Steven Parnell — declined to comment. The company’s dealings with Metals X involved the processing of tailings from the historic Great Fingall mine near Cue and BNM was paying for it by the truckload.
Metals X boss Peter Cook said the miner would not incur any loss.
Doray is linked to BNM after its successful takeover target Mutiny Gold did a deal for tailings and a mining agreement for the White Wells prospect last year.
Silver Lake netted $1.8 million from the dry hire lease in the March quarter and was forecasting another $2.4 million for the June quarter.
BNM could see Silver Lake as a potential white knight, but it is unlikely given the gold miner shuttered its $93 million Murchison project last year just seven months after declaring commercial production.
Silver Lake chairman Paul Chapman declined to comment and managing director Luke Tonkin did not return phone calls.
The prevailing view is if BNM’s project falls over, Silver Lake would be more inclined to put its Murchison assets on the market.
The refurbished Tuckabianna plant could be an attractive option for buyers.
Silver Lake blamed last year’s Murchison closure on the costs of maintaining a 250-person fly-in, fly-out workforce and has since shifted its focus to the Mt Monger operations near Kalgoorlie-Boulder, which produced 33,198 ounces in the March quarter.
