eBusiness Weekly
HARARE – Dallaglio Investments (Pvt) Ltd has acquired a 95 percent interest in Delta Gold Zimbabwe (Pvt) Ltd, which operates the Eureka Gold Mine.
Dallaglio is a subsidiary of AIM-listed mining company Vast Resources, which has operating mines in Romania and Zimbabwe. Vast’s economic interest in Dallaglio is 25, 01 percent.
The $4, 485 million purchase price of the gold mine was financed by a loan from Sub-Sahara Goldia Investments (‘SSGI’) to Dallaglio.
SSGI has an effective 24, 99 percent interest in Dallaglio and therefore funding for the acquisition has been sourced by Vast’s associated entities in Zimbabwe without recourse to Vast.
Dallaglio’s 95 percent interest in Delta Gold Zimbabwe (Pvt) Ltd from Alpha Resources Ltd and Industrial Development Corporation of South Africa Limited, provides Vast Resources with an indirect 23, 75 percent interest in the Eureka Gold Mine.
In addition, Dallaglio will finance Delta Gold for $1, 8 million in order to meet Delta Gold’s current creditors.
Commenting on the development Vast Resources CEO Andrew Prelea said:
“We are extremely pleased to announce the first new acquisition together with our strategic partners in Zimbabwe for many years. This demonstrates our continued belief in Zimbabwe and the ability to find robust assets to add to the Vast portfolio. The Eureka mine has had historical investment in excess of $30 million in the late 1990s. We believe this to be a highly attractive acquisition target given the size of the resource and level of investment in equipment made to date and I look forward to providing updates regarding development and commissioning at Eureka in the coming months.
“The knowledge we have accumulated from our operations at Pickstone Peerless is invaluable in assessing the true value of dormant mines such as Eureka, that can be brought in to commercial production in the near term.
“At the beginning of this year I mentioned we will be pursuing new opportunities in both Zimbabwe and Romania that will create further value to shareholders utilising external funding and this is the first of those opportunities to do so.
“Furthermore, in the light of this transaction and of anticipated further transaction opportunities, we are giving consideration to the current holding structure of our Zimbabwe assets and will give updates to the market on this in due course.”
Vast’s board says it expects that loan repayments to SSGI and finance of Delta Gold creditors can be met by distributions from Dallaglio’s wholly owned subsidiary Breckridge Investments (Pvt) Ltd from cash flow from the Pickstone Peerless gold mine.
The Reserve Bank of Zimbabwe (RBZ) has given permission for the exercise of the Option provided the exercise price equates to the net asset value of Delta Gold.
Delta Gold has been on care and maintenance since 2008 with no income and with expenditure consistent with care and maintenance.
And the Eureka Gold Mine is situated about 5km south east of Guruve, 300km from the Pickstone Peerless mine and 150km north of Harare.
It was developed as a modern gold mine in 1999 designed to produce approximately 70 000 ounces of gold per annum from an open pit before an underground operation was established. The mine was operated during 1999-2000 after which operations were suspended.
Eureka has a NI43-101 Mineral Resource compiled by Gordon Knoll of TWP Projects (Pty) Ltd in 2012 of 22, 3 million tonnes at an average grade of 1.90 grams per tonne for 1 367 600oz, of which 13, 4 million tonnes is an Indicated Mineral Resource at an average grade of 1.78g/t for 1 081 700oz.
The gold operation is exploiting a granitoid intrusion into the Chinhoyi-Guruve Greenstone Belt.
