Safety pledge as Beaconsfield says mine to reopen by March

BEACONSFIELD Gold’s northern Tasmanian mine, where a rock fall last year killed a miner and trapped two others for two weeks, will be reopened by March, almost 11 months after the accident forced its closure.

Chief executive Bill Colvin promised that safety would be “equal to or better than any other mine around”, after announcing the company would gain full control by buying from Macquarie Bank for $2.85 million debt with a face value of $48 million owed by joint-venture partner Allstate Explorations.

(Macquarie acquired a $77.4 million debt for $300,000 in 2002, and $48 million remained outstanding when the mine was closed after the rock fall in April.)

Macquarie, in turn, will donate the $2.85 million to mine employees. Mr Colvin said the mine, which once produced about 125,000 ounces of gold a year, would be back to full production within three to six months of opening. He expects to hire about 50 employees to match staff numbers before the accident.

“I am optimistic that we will see some production start really within the next few weeks,” Mr Colvin said.

“There were approximately 130 employees when the mine closed. That was reduced through voluntary and other retrenchments around last June so the level now is between 70 and 80 employees and we would certainly look to increase that number as the mine moves to full production.

“I think we’ll be getting to a point where we can demonstrate that the safety levels are equal to or better than any other mine around. That should provide enough satisfaction to employees that it is a safe place to work.”

The miners, who last week voted 83-18 in favour of Beaconsfield Gold’s offer to buy the debt over a rival offer from Allstate, will receive $700,000 once a final deal is signed and $2.15 million once the mine has reopened and reached commercial production.

Beaconsfield Gold has also struck a deal with the Australian arm of US goldminer Newmont to acquire its 57.2 per cent shareholding in Allstate for $1.4 million, giving Beaconsfield an 82.8 per cent stake in Allstate. Mr Colvin said the mine’s future would be more certain under single ownership.

“On shareholder approval of the Newmont transfer, we will then move to make a takeover offer on the remaining shareholders on the same terms as are being provided to Newmont,” he said.

But he ruled out a compulsory acquisition, saying Beaconsfield was quite comfortable with Allstate as a listed subsidiary.

Administrators of Allstate, which entered administration in 2001, welcomed the deal, but warned that if it was not finalised they would have to recommend to creditors that Allstate be wound up.

Mr Colvin expects Beaconsfield Gold shares to return to trading in the next three months.

Source: www.theage.com.au