There's life in the site of the old Beaconsfield mine disaster

Getty

Stavely Minerals says buying the old Beaconsfield gold processing plant on the cheap was an opportunity “too compelling to resist”.

Stavely will pay about $2 million for the 350,000 tonnes a year plant and associated leases in Tasmania.

The 1.2 km-plus deep Beaconsfield mine is synonymous with a 2006 underground collapse which left one person dead. Two miners were trapped for 2 weeks before they were rescued.

The mine was closed around 2012, and Stavely says it’s going to stay that way.

“The underground Tasmania mine encountered seismic activity at depths beyond approximately 700m below surface,” it says.

“Stavely Minerals has no intention whatsoever of reopening the underground mine at Beaconsfield.”

But it does mean the company now has an established processing facility, 130km by road from its high grade Mathinna goldfield.

It would cost up to $14 million to get the mothballed processing facility up to scratch, but the acquisition is a “coup”, says managing director Chris Cairns.

“Acquiring an established gold processing plant for a fraction of the cost to build and permit a new one – not to mention the potential lead time associated with permitting a new facility in Tasmania – is an exciting opportunity which provides our shareholders with exposure to the potential development of a high-grade gold business on Australia’s East Coast,” he says.

“We have seen high-grade gold assets deliver significant value for investors at projects like Fosterville in Victoria and Bellevue in Western Australia, and we believe there is a genuine opportunity to create a quality gold asset in Tasmania.”

This article first appeared at Stockhead, Australia’s leading news source for emerging ASX-listed companies. Read the original here. Follow Stockhead on Facebook or Twitter.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.