ACR's Dalny deal awaits shareholder approval

HARARE - AIM-lIisted miner African Consolidated Resources (ACR) awaits Falcon Gold Zimbabwe (Falgold) shareholders’ approval to finalise the acquisition Dalny Mine (Dalny).

The group plans to buy Dalny, wholly-owned by Falgold, for $8 million.

Falgold said the Zimbabwe Stock Exchange (ZSE)’s listings committee demanded that its shareholders must first approve the proposed disposal at an extraordinary general meeting to be held on July 29, 2014.

To accommodate the ZSE’s demands, Falgold has requested, and ACR has agreed, to extend the date for payment of the outstanding consideration (being a net cost of $7,5 million) from July 22 to July 30, 2014.

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.

“ACR have offered a full payment price of $8 million.

“The estimated net cash from transaction is approximately $2,5 million,” the ZSE-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 a 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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