Century zinc operator New Century Resources has decided against buying into the Goro nickel and cobalt mine in New Caledonia.

The company announced today that it had elected not to proceed with a binding offer for the acquisition of 95 per cent of the issued shares in Goro owner Vale Nouvelle-Calédonie.

New Century has been engaged in an extensive process of asset due diligence and commercial negotiations since late May with Vale, the French State and other stakeholders.

It said it had also been engaging with the governing body of the Southern Province of New Caledonia regarding ongoing environmental bonding requirements for Goro and with minority shareholder Société de Participation Minière du Sud Calédonien regarding the future equity structure of VNC.

“While New Century’s due diligence and business analysis is now complete, which indicated strong potential for sustainable long-term operations at Goro, negotiations with various stakeholders have not been able to generate a funding package and equity structure for VNC which adequately
accommodates a suitable risk/reward scenario for shareholders of New Century Resources,” it said in a statement to the ASX.

“As a result, the Board of New Century has elected not to submit a binding offer for Goro within the current exclusivity period and this exclusivity has now lapsed.”

New Century Resources owns the Century zinc mine at Lawn Hill, 250km north-west of Mount Isa in the Lower Gulf of Carpentaria.

It achieved a 22 per cent increase in zinc metal production at the tailings reprocessing operation in the June quarter, reaching about 34,500 tonnes.