ACR, Falgold in $8m mine deal

HARARE - United Kingdom-based African Consolidated Resources (ACR) is set to acquire Falcon Gold (Falgold)’s Dalny Mine (Dalny) for $8 million.

Falgold’s plan to dispose of Dalny has been on the cards since last year, when the Kadoma mine was mothballed due to operational challenges.

“The company is currently engaged in discussions with African Consolidated Resources to dispose of the assets and liabilities of Dalny,” said Falgold.

“ACR have offered a full payment price of $8 million. The estimated net cash from transaction is approximately $2,5 million,” the Zimbabwe Stock Exchange-listed miner said.

Falgold said the transaction is subject to a due diligence and various actions which ACR is in the process of undertaking.

The terms of the disposal include full settlement of Dalny’s all-known trade creditors and payment of salary arrears.

ACR will also settle any capital gains tax or other liabilities due to the Zimbabwe Revenue Authority.

The balance of funds after the payments will be remitted to Falgold.

ACR is an AIM-listed junior resource development company focused on Zimbabwe, Zambia and Mozambique with projects covering gold, nickel, platinum, copper, phosphate and diamonds.

Dalny was facing operational challenges including, rising labour and power costs, high domestic royalties, taxes and fees, as well as a damaging and costly illegal strike by workers last year.

In March last year, Falgold sought a High Court order to bar employees from taking over Dalny following a salaries dispute.

In an urgent chamber application, Falgold cited Mullasios Sakala and 17 others as respondents.

The court heard that workers stormed the mine, in Chakari — 175km southeast of Harare, on February 23 last year and disrupted work, after preventing other employees from performing their duties at the mine.

According to court papers, the respondents comprised of Falgold’s employees, former employees and those on suspension.

Falgold, owned by Canada-listed junior miner New Dawn incurred a $12.5 million loss in the year to September 2013 after shutting down Dalny.

In addition to Dalny, Falgold owns Golden Quarry and Venice mines and recently indicated that it was looking for more opportunities in the country.

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