Aim-quoted mining and exploration firm Central African Gold (CAG) will spend £3,2-million to acquire an 84,7% interest in Falcon Gold Zimbabwe and the entire issued share capital of Olympus Gold Mines, the company said on Monday.
The company reported that Falgold and Olympus had a combined resource estimate of 2,48 million ounces of gold, with Jorc compliant reserves of 632 000 oz. In the financial year to September 2006, the two companies had a combined turnover of Zim$1,83-billion (some £3,75-million) and an attributable net profit of Zim$199,7-million (about £409,045) having produced 21 031,5 oz of gold.
“The acquisitions are in line with the company's strategy of becoming a leading mid-tier operating gold company, with an initial target of circa 200 000 oz of annualised low-cost gold production and 7,5-million ounces of resource by the end of 2008,” CAG said in a statement.
Falgold, listed on the Zimbabwe Stock Exchange, and Olympus, which is an unlisted private company, share the same management and majority shareholders and CAG said that it intended to incorporate Olympus into Falgold, which would remain listed.
The Falgold operation includes the Dalny, Golden Quarry and Venice mines, while Olympus operates the Old Nic and Camperdown mines.
CAG CEO Greg Hunter said that the transaction gave the company a foothold in a country that ranked third behind South Africa and Ghana in total historic gold production and that it the new assest came with production that could be ramped up in short order.
“Coupled with a significant reserve and resource base, the acquisition complements our gold production profile and strategy in Ghana. The 'blue sky' component of this acquisition also complements the greenfield exploration portfolio being established in Mali and Botswana.”
The aggregate consideration of £3,2-million for the acquisition would be satisfied with £2,3-million in cash and the balance through the issue of 9-million new ordinary shares in the company at 9,64 pence a share.
source news : miningweekly.co.za
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