MNG Gold, a privately-owned Turkish gold exploration and development company focused on West Africa and Turkey, is to invest US$30 million in Aureus Mining to achieve a 55% interest in the company. The agreed price of 3.21p per share represents a premium of 22% to the closing price on AIM on 14 June.
The funds will be used to reduce outstanding creditor balances, bolster working capital and facilitate the ramp up of the processing plant. Aureus Mining declared commercial production at its New Liberty gold mine, in Liberia, in March this year, seven months after official opening of the mine in August 2015, but has recently experienced a number of problems in the plant, which led a to temporary suspension of operations. The plant is now scheduled to be restarted from mid-June 2016.
As a result of the change of control, MMG will nominate a slate of new directors, with Serhan Umurhan, currently General Manager of MNG Gold, replacing CEO David Reading, and Geoff Eyre, currently CFO of MNG Gold, replacing Paul Thomson as CFO.
Aureus has, meanwhile, received credit approval from its lending banks (Nedbank Limited, FirstRand Bank Limited and the Export Credit Insurance Corporation of South Africa Limited) for a four-month default waiver and standstill agreement during which time the company will work with the lenders to reschedule the debt repayment profile.
As at 31 May 2016, the company had cash of US$3.3 million and trade and other payables of US$28.2 million.
MMG to invest in US$30 million Aureus Mining and gain majority interest: AUE