Variscan offloads French operations for $4.3m in bid to cut costs
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Variscan Mines is selling a French subsidiary and its tungsten, copper and gold joint venture in a cash and scrip deal worth up to $4.3 million in a bid to lower costs.
The move follows a review of the company’s (ASX:VAR) priorities and a re-balance of its sovereign exposure.
“Following our recent acquisition in Chile, this transaction marks the latest step in the delivery of our change program,” chief Stewart Dickson said.
“Our previously announced corporate re-organisation process and cost reduction program is accelerating.”
Variscan is selling Variscan Mines SAS and its 20 per cent stake in the Couflens project in southern France to Apollo Minerals (ASX:AON).
Apollo is Variscan’s partner in the Couflens project.
The seven existing licences owned by Variscan Mines SAS will be acquired by a new wholly owned subsidiary, Variscan Mines Europe, prior to completion of the sale of Variscan Mines SAS.
This will allow Variscan to retain exposure to the assets, but no longer be required to cover the existing fixed costs of Variscan Mines SAS.
Variscan spent $326,000 on staff and administration costs in the December quarter – more than it spent on exploration. The company estimated that would rise to $450,000 in the current quarter, while exploration spend would drop to $65,000.
The company had $811,000 in cash at the end of the last quarter.
Shares did not move on the news on Thursday morning. In the past year Variscan shares have tumbled 73.1 per cent to 0.7c.