"AuStar Gold had progressed discussions with financiers to ensure all funding requirements could be met under the Assignment Deed, subject to it satisfying its own further due diligence requirements. Additional information suggesting significant potential legal risks were discovered and could not be resolved to the satisfaction of all key stakeholders and accordingly the Company will not be proceeding with the completion of the Agreement to acquire the Debt. In addition, the Company understands that a third party has proposed to put forward an alternative Deed of Company Arrangement (DOCA) proposal for the purchase of Centennial Mining Ltd. An alternate funding arrangement was also being considered by the Deed Administrators for the debt owed by Centennial and its subsidiary. The Company has determined that it will not progress its already extensive and good faith efforts with counterparties and submit an alternative DOCA proposal."
Yes the administrator did state that the best option was for the deal to proceed but it seems there has been some games behind the scenes that not even the negative posters predicted. So I would not discount that a new deal could be made down the track as it would be the best for the region development as a whole for it to occur.
In the meantime it would be good if they refocus onto MS and continue the turn around performance announced in October, drill some more reserves at both MS and RoD.
Any capital raising to occur now will probably be put towards drilling up reserves to increase production, the acquisition was a short cut. At only $8m MC is very cheap for the prospective ground they hold with production. A comparable company KZR is currently valued 10x with similar grade and intercepts that AUL has had though they have no production.
