Aureus starts transition to owner-operator mining model at New Liberty

JOHANNESBURG (miningweekly.com) – West African gold producer Aureus Mining has taken the first steps to transition its New Liberty gold mine, in Liberia, to an owner-operated mine.

Aureus believes the adoption of owner-operator mining will significantly reduce the ongoing costs of mining operations and improve the company’s operational and financial flexibility. 

The mining services contract between Aureus subsidiary Bea Mountain Mining Corporation (BMMC) and MonuRent has been novated to Atmaca Services, a Liberian company owned by MNG Gold, which owns 55% of Aureus.

Atmaca will pay MonuRent about $33-million for the sale assets, including $15.4-million to take ownership of the mining equipment, $7.1-million for the inventory currently on site at New Liberty, $7.9-million for invoiced receivables and about $2.5-million for future uninvoiced receivables incurred by BMMC during July and August.

It will also pay MonuRent $4.5-million as a contract novation fee.

MonuRent employees will be transferred to Atmaca to enable it to operate the contract without an interruption to mining operations.

Aureus plans to complete an equity fundraising, which MNG has agreed to underwrite, after which BMMC will buy the sale assets from Atmaca.

BMMC will then also pay Atmaca $4.5-million to terminate the contract and, thereby, achieve the transition of BMMC to owner-operator of the mining operations.

“We are pleased to have successfully taken the first steps of transitioning Aureus to an owner-operator. We believe this is an attractive financial proposition as the capital requirements associated with completing this transaction are expected to be far outweighed by the significant reductions in future operating costs.  

“In addition, it is an important strategic initiative that gives the company control over the mining fleet,” Aureus lead director Loudon Owen said on Tuesday.

Meanwhile, Aureus has also reported that the New Liberty processing operations have continued to experience periods of unscheduled downtime.

Aureus had suspended gold processing operations early in May after the detoxification circuit was found to not be operating to original design specifications and leaking cyanide beyond the allowed limits.

Processing operations were allowed to restart in June, after the company had made some modifications to the plant.

Aureus on Tuesday said the detoxification circuit had been continuously operating at a stable level and performing to its design specifications following recent modifications, with  all discharges from the tailings storage facility (TSF) within permitted levels. 

However, the company is working with its consultants to modify the layout and operation of the TSF, including using the TSF as a source of plant make up water, to allow for an increased retention time for process effluent and also to enable more control over future discharges.