ACR pursues $18m funding

HARARE - AIM-listed African Consolidated Resources (ACR) says it remains in negotiations with investors concerning $18 million funding.

The miner intends to spend the cash on acquiring Falcon Gold Zimbabwe (Falgold)’s Dalny Mine and to fast track production at its Pickstone Peerless Gold project in Zimbabwe. It plans to buy Dalny for $8 million.

The company said it will also require further funding in the 2014 third quarter to continue operating as a going concern.

ACR currently awaits Falgold shareholders’ approval to finalise the acquisition.

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.

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