AuStar Gold Announces Inception of Discussions with Centennial Mining Administrators

Today, on 3rd April 2019, AuStar Gold Limited (ASX:AUL) announced that following a number of recent unsolicited approaches from the existing creditors of Centennial Mining Limited (ASX: CTL, Administrators Appointed), AuStar Gold has entered into discussions with the Administrators, Korda Mentha, and other parties to assess the potential of proposing a Deed of Company Arrangement (DOCA) to Centennial Mining Limited creditors. It is expected that AUL will make further announcements in the coming days regarding the details of any proposed DOCA and encourages all the existing creditors of CTL to take no immediate action regarding any alternative proposals until AuStar Gold provides further updates.

The company’s Executive Chairman, Mr Frank Terranova, stated that they have publicly advised that regional consolidation is a logical component of the company’s overall growth strategy. Bringing these assets together has the potential to accelerate growth for all the shareholders, as well as deliver economic benefits to the region. With obvious geographical, geological, mining, processing and administrative synergies, the possible asset combination has the potential to create a platform for sustained growth within Victoria and beyond. The group has been successfully ramping up gold production at their Rose of Denmark and Morning Star mines, as well as enjoying excellent drilling success across their portfolio. The company also holds significant exploration assets surrounding the A1 mine, encompassing the bulk of the highly prospective regional corridor, in which the Morning Star, Rose of Denmark and A1 mines are situated. The company has been delivering on its reputation in dealing with all the stakeholders professionally and respectfully. AUL intend to continue this approach through any process with Centennial and its creditors.

In the previous update, AUL announced March 2019 quarterly activities report, in which it highlighted that the mining and processing activities were successfully recommenced. On 25th February 2019, the reef was intersected and has been developed to the dyke over sediment contact. Few recommencement issues were observed while restarting operations, including the completion of employee recruitment programs, which resulted in a minor delay of development of the Stones Reef and the stoping of material at the Rose of Demark mine. At the end of the March quarter, the mining section was mined for 121.7 development meters, 529.0 waste tonnes and 985.0 ore tonnes. As per the quarterly cashflow report, AUL reported cash outflow of $1,057K for the exploration and evaluation activities for the March quarter. Net cash used in operating activities reported an outflow of $1,640K. Net cash from investing activities reported an inflow of $16K. Cash and cash equivalents at the end of March quarter stood at $973K.

On the stock information front, at the time of writing (on 3rd May 2019, AEST 01:30 PM), the stock of AuStar Gold was trading at $0.005, trading flat, with a market capitalisation of ~$16.95 million. Today, it touched day’s high at $0.005, day’s low of $0.004 with an average daily volume of 23,225,525. Its 52 weeks high price stands at $0.012 and 52 weeks low price at $0.003, with an average volume of 4,044,273. Its absolute return for the past one year, six months and one month are -44.44%, 25%, and 11.11%, respectively.

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