LONDON (Alliance News) - African Consolidated Resources PLC Monday said its deal to buy the Dalny mine in Zimbabwe from Falcon Gold Zimbabwe Ltd has been held back to await formal approval by Falcon Gold shareholders.
The AIM-listed resources and development company said it was informed by the Zimbabwe Stock Exchange Listings Committee that the major deal requires the approval by Falgold shareholders at an extraordinary general meeting, expected on July 29.
The company said that it sees the delay as a formality as New Dawn Mining Ltd, which owns 84% of the shareholding in Falgold, will vote in favour of the sale.
However, as a result of the delay, African Consolidated has agreed to extend the date for payment of the outstanding consideration to July 30 from July 22. The company has already paid USD1 million of the USD8.5 million deal.
Dalny is next to African Consolidated's existing Pickstone-Peerless and Gadzema gold projects, and has an operational processing plant and ancillary infrastructure which would provide a central processing plant to treat ore from Pickstone, therefore fast-tracking gold production at that site. The company said this eliminates the risks of having to build a new plant at Pickstone and lowers upfront capital expenditure to USD14.3 million from the USD27.3 million estimate used in the pre-feasibility study for site.
African Consolidated said earlier in June that its own internal financial model has generated a net present value of USD76 million over a 19 year mine life including Dalny, and all-in costs of USD855 an ounce over life of mine. The company added that there is an opportunity for Dalny to scale up and secure other regional ore resources for processing.
The company also said it continues to be in active discussions concerning its funding of approximately USD18 million, which is anticipated to be by way of a mix of debt and equity, noting that it will require further funding in the third quarter to continue as a going concern.
African Consolidated Resources shares were down 6.2% to 1.43 pence on Monday.