Austral Gold Acquires 51 Percent Stake in Chilean Mining Service

Austral Gold, a growing precious metals mining and exploration company, has acquired the controlling stake in Humberto Reyes Arriendo de Maquinarias, an underground mining contract. Humberto Reyes owns mining equipment and associated vehicles with a company value of around $4 million.

The acquisition – done through Austral Gold’s subsidy Guanaco – cost Austral Gold around $2.7 million; $450,000 was paid up front, the remaining balance will be paid in monthly installments over time.

Humberto Reyes has been working on underground contract mining at the site since 2011. There are several benefits for Austral Gold in this acquisition, including important annualised savings for Guanaco.

With many mining companies looking for footing in the South American mining landscape, Chile is a great foot in the door. Some believe that Latin America and Australia are natural partners for innovation in the industry.

A spokesperson for Austral Gold has said that the acquisition “is a strategic investment for [Austral], since it provides flexibility to accelerate mining of the Guanaco mine resource; allows greater control over safety and production practice at the mine; ensures competitive costs for underground development; and gives management greater overall control over the mine’s operations.”

Austral Gold director Stabro Kasaneva further went on to say that “[t]his transaction is a pleasing development for Austral Gold and represents key strategic investment in the further development of our flagship Guanaco project.”

Austral Gold now owns 51 percent in the company. With the current deal also comes the option to acquire the remaining 49 percent of company in two and a half years. A price would be agreed upon at a later date.

Previously reported by Ferret and Proactive Investors Australia