Centrex Limited Enters DOCA with PRL Acquisition; Expert Report Values Shares at Nil

Background and Administration

Centrex Limited (ASX – CXM), a mining company focused on phosphate and base metals exploration, along with its subsidiary Agriflex Pty Ltd, entered voluntary administration in early 2025. The administration followed financial difficulties, including insufficient funding to continue operations at the Ardmore Phosphate Project, the Group’s primary asset located in northwest Queensland. The Ardmore project was placed into care and maintenance shortly after the administrators’ appointment due to funding constraints and regulatory directives.

Since March 2025, the administrators have been conducting a sale and recapitalisation process to maximise value for creditors. This process culminated in a proposed Deed of Company Arrangement (DOCA) with PRL Group Limited (PRL), which involves PRL acquiring 100% of Centrex shares subject to court approval under section 444GA of the Corporations Act.

DOCA Proposal and Conditions

The DOCA aims to restructure Centrex’s debts, privatise the company, and establish a Creditors’ Trust to satisfy creditor claims. Key conditions for completion include obtaining court approval for the compulsory transfer of shares to PRL, securing relief from the Australian Securities and Investments Commission (ASIC) to enable the share transfer, and finalising agreements with key creditors and stakeholders.

PRL has committed to contributing A$8.2 million to the Creditors’ Trust and agreed to ongoing operational payments to support the Group’s business continuity. The DOCA also contemplates the replacement of Centrex’s current directors with PRL nominees and the release of unsecured creditor claims in exchange for participation in the Creditors’ Trust distributions.

Independent Expert Report – Nil Equity Value

Quentin James Olde of Ankura Consulting was engaged as the independent expert to assess the value of Centrex shares on a liquidation basis, which is the likely outcome if the DOCA and share transfer are not approved. His report, dated 21 July 2025, concludes that Centrex has a material deficit of assets relative to liabilities, resulting in nil residual equity value for shareholders as of the valuation date.

The expert’s assessment considered the Group’s consolidated financial position, the value of assets including mining tenements and plant, and creditor claims. The Ardmore Phosphate Project’s operational suspension and regulatory constraints were key factors limiting asset realisation in a liquidation scenario.

Mineral Asset Valuation by Measured Group

Measured Group Pty Ltd prepared an independent technical specialist report valuing Centrex’s mineral assets across Queensland, Western Australia, and New South Wales. The report, dated 20 May 2025, valued the mineral tenements using multiple valuation approaches including comparable transactions, appraised value, and geoscientific methods.

The preferred valuation for the mineral assets is approximately A$5.6 million, reflecting the combined value of the Ardmore Phosphate Project, the Oxley Potash Project in Western Australia, and the Goulburn Polymetallic Project in New South Wales. The Oxley project is an early-stage, technically complex potash deposit with significant capital and operating cost uncertainties, while the Goulburn project is an early-stage base metals exploration asset constrained by land access issues.

Outlook and Market Context

The DOCA provides a potential pathway for Centrex to restructure and continue operations under new ownership, offering creditors a better return than liquidation. However, the completion of the DOCA is contingent on court approval and regulatory relief, introducing uncertainty.

Market conditions for phosphate rock and base metals remain volatile, with global demand influenced by agricultural fertiliser needs and the energy transition. The Ardmore project’s high-grade phosphate concentrate is expected to command a premium in the market, while the Oxley project faces technical and economic challenges that require further validation.