Flooded Century mine finds itself in $30m hole after deluge
Takeover target New Century Resources has revealed it had been forced to look for $30 million from its controlling shareholder because of short-term liquidity problems created by the flooding at its Century mine near Mt Isa.
A screenshot of supplied vision of flooding in Burketown Queensland in early March. (AAP Image/Supplied by Queensland Police)
In an update to investors, New Century said its controlling shareholder Sibanye-Stillwater was in discussions to deliver a rescue package.
The company said Sibanye and Sibanye Resources Australia had confirmed that they were committed to working with New Century to ensure it remained in a position to pay its debts as and when they fell due and payable. It was expected to provide or procure up to $30 million to help the company.
The flooding was expected to cost the company up to 20,000 tonnes of zinc metal.
Before the floods hit, Sibanye had launched a takeover for New Century at $1.10 a share, which has been accepted by the board.
It said it intended to keep the offer open on its original terms.
The monsoonal rains that hit the north and north west of the state led to falls of 752mm this month and 1756mm in the financial year so far.
The flooding cut off access to the Century mine site by road and the company was now working with the local Burke Council to get the road re-opened.
“The company does not expect to recommence production for two to three weeks, at which time hydraulic mining activities are expected to operate at approximately 75 per cent capacity, with a return to normal production levels not expected until mid-to-late April,” the company said.
“Given the challenging conditions, the duration of suspension is difficult to accurately predict and the current estimate is subject to no further significant rainfall events, the ongoing availability of infrastructure and gaining access to operational consummables.”
