Aeon in talks on Century assets, but liabilities a deal-breaker (updated)

Loyal Metals

26/10/2016 01:48

(Adds MMG comment) 
    MELBOURNE, Oct 26 (Reuters) - Australian base metals miner 
Aeon Metals  AML.AX  said on Wednesday it was interested in 
parts of MMG Ltd's  1208.HK  giant Century zinc mine, but would 
be unable to shoulder all of the liabilities of the mine that 
was wound down last year. 
    "Aeon is unable to pursue a transaction based on MMG's 
preferred structure which involves taking on all the assets and 
liabilities associated with the Century mine and 
infrastructure," it said in a notice to regulators.  
    "Nevertheless, Aeon has made clear to MMG its interest in 
certain assets of Century."  
    Clean up costs at Australia's largest open-cut zinc mine 
stand at $378 million, nearly 10 times the market capitalisation 
of Aeon Metal, at A$48.7 million ($37.2 million).  urn:newsml:reuters.com:*:nL3N18A27E 
    MMG, the Hong Kong-listed arm of state-owned China Minmetals 
Corp, had to hike its estimate of closure provisions more than 
60 percent just months before shuttering the mine last year as 
the cost of remediation became clearer. 
    The work includes capping and compacting waste dumps, and 
rehabilitating an evaporation pond and a tailings dam, but 
doesn't involve filling the open pit, which covers 3.5 square km 
(1.4 sq miles).  
    "We are pleased with the significant interest in the Century 
mine assets and we will not provide commentary on the parties 
involved," a spokeswoman for MMG said. 
    Major miners have been trying to sidestep hundreds of 
millions of dollars in closure costs by selling off pits and 
infrastructure, but the cost of environmental rehabilitation has 
made it tough to seal deals.  
 
($1 = 1.3082 Australian dollars) 
 
 (Reporting by Melanie Burton; Editing by Richard Pullin) 
 ((melanie.burton@thomsonreuters.com Twitter: @MelanieMetals; 
+613 9286 1421; Reuters Messaging: 
melanie.burton.thomsonreuters.com@reuters.net)) 
 
Keywords: AUSTRALIA MINES/M&A