Subiaco-based Carbine Resources has pulled the pin on its planned redevelopment of the Mount Morgan copper-gold project in Queensland, in which it has already invested $12 million, while managing director Tony James and two directors have tendered their resignation.
Non-executive chairman John Fitzgerald and Graham Brock have resigned immediately, while Mr James will continue to provide services over the next six months.
All three have been with the company since 2016.
Current company secretary Oonagh Malone will join the board immeadiately while Evan Cranston has been appointed as non-executive chairman.
Carbine entered into an agreement with Patrick Walta-led Raging Bull Group in 2014 to take a 75 per cent stake in the Mount Morgan project from Norton Gold Fields.
The company completed a feasibility study in 2016 to recover the minerals remaining in the tailings at the historical mine.
However, last month the company announced that a review of the project had revealed an increase in the all-in sustaining cost from $549 per ounce to $862/oz.
“The increase is due primarily to higher cyanide consumption and lower by-products credits due to a lower pyrite price and the loss of copper sulphate premium associated with a change in the copper products produced,” Carbine said in a statement to the ASX.
“The company is unable to manufacture copper sulphate at the required market specification and instead will produce cemented copper concentrate and copper cathode.”
Carbine had been seeking to renegotiate the terms of the agreement with Norton and Raging Bull, but the company said it had not been able to negotiate the required outcomes, thus forcing the project to be halted.
“The board's resolution is a direct result of the company not being able to achieve any meaningful outcomes with the key stakeholders to improve the terms of the various agreements associated with the project to increase returns to an acceptable level,” the company said.
Carbine has spent $12.7 million on the project to date, with the capital cost for the project forecast at $87 million.
Mr Walta served on the board of Carbine as an executive director from 2014 until 2016, and set up Raging Bull in 2009 with long-time business partner John Carr.
Raging Bull is focused on the acquisition and rehabilitation of former mining sites.
Carbine also said it had decided not to exercise its option to acquire the remaining 25 per cent of the project from Raging Bull and was now seeking new project opportunities.
Shares in Carbine were down 11 per cent at 3.2 cents each at 3pm AEDT.
