Maximus Resources is poised to sell 100 per cent of its Burbanks gold mill in Western Australia to SMS Innovation, a subsidiary of Adaman Resources, to be completed by 31 August 2019.
|The Burbank treatment plant|
Under the terms of the Asset Purchase Agreement (APA), the Adaman interests will pay to Maximus a total consideration of AU$5.1 million for Burbanks. The consideration consists of $2.0 million, received on 4 April 2019, AU $0.5 million received on 19 August 2019 and a final payment of $AU2.6 million to be received on or before 31 August 2019.
Maximus expects completion of the Burbanks assets sale on Friday 30 August 2019, and therefore no interest will be payable on the Adaman-related loans prior to them being repaid as part of the Burbanks acquisition price.
The gold-in-circuit contained in the Burbanks process tanks at the initial transaction announcement earlier this year, was to be purchased by Adaman as part of the sale terms. However, delays to the completion of the transaction resulted in Maximus removing the carbon from the circuit and recovering all gold. A total of AU$1.75 million was received by Maximus from the sale of this gold. The Burbanks mill is currently on standby until the sale is finalised, with only security personnel on site.
Maximus has also secured up to 24 months milling capacity at 5,000 tonne per month at Burbanks under its new Adaman ownership, from January 2020, with the option to extend the term by agreement. Securing 5,000 tonnes per month milling capacity for a minimum of 24 months ensures that Maximus can continue the development of the Company’s nearby Spargoville gold projects and accelerate the approvals documentation, with enhanced financial capacity to continue to pursue projects for potential acquisition.
“The sale of Burbanks will result in Maximus having a healthy cash balance to fund ongoing gold exploration and project activities, backed by two years of secure mill access and capacity for future gold ore production,” said the Company in a statement.