(Corrects dollar figure in last paragraph.)
Beaconsfield Gold NL will increase its stake in Allstate Explorations NL and become the company's biggest creditor as part of a plan to gain control of its namesake mine in Australia's Tasmania state.
Beaconsfield will buy a 57.2 percent stake in Allstate for A$1.4 million ($1.1 million) from a unit of Newmont (NEM:US) Mining Corp., and will also spend A$2.85 million buying debt worth A$48 million, the Melbourne-based company said today in a statement.
The mine, a joint venture between Beaconsfield and Allstate, has been closed since April 25 when an earthquake triggered a rock fall, killing one miner and trapping two others underground for 14 days. The two companies have been tussling for control in an attempt to restart the mine.
``I am optimistic that that we will see some production start within the next few weeks,'' said Bill Colvin, chief executive officer of Beaconsfield, at a conference call with reporters. ``By which I mean February or early March and obviously there will be a ramp-up.''
The company's shares last traded on the Australian Stock Exchange on April 24 at 43 cents and were suspended two days later. Beaconsfield will own 82.8 percent of Allstate.
It would take three to six months to return to production levels reached before the accident, Colvin said. The mine produced 125,795 ounces of gold in 2005, according to the company's March 2006 production report.
The company had also lodged a A$50 million business interruption insurance claim, Colvin said. There are still creditors, mainly local suppliers, owed about A$1.1 million, he said.
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