ACR's Dalny Mine deal approved

HARARE - AIM-listed miner African Consolidated Resources (ACR)’s acquisition of Falcon Gold Zimbabwe’s (Falgold) Dalny Mine (Dalny) and associated infrastructure is on course following Falgold shareholders’ approval of the deal.

The resolution was passed at an extraordinary general meeting in Bulawayo on Wednesday, and shareholders unanimously voted for the sale of the mine.

The deal is subject to ACR’s fulfilment of outstanding conditions.

Falgold noted that the resources company still had outstanding conditions to fulfil prior to the disposal of the assets (along with the related liabilities) of Dalny Mine, pertaining to a $12 million capital raise.

ACR and Falgold also agreed to extend the date of payment of the outstanding amount of $7,5 million for the purchase of Dalny to 22 August 2014, ACR said.

The approval follows procedural requirement from the Zimbabwe Stock Exchange (ZSE)’s listings committee, which stipulated that Falgold shareholders must first approve the proposed deal.

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

“The estimated net cash from the transaction is approximately $2,5 million,” Falgold said. In accordance with the terms of the disposal, ACR will settle in full 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 (Zimra) and the balance of funds after the payments will be remitted to Falgold.

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.

Following the payment extension, ACR said its remains in discussions with investors concerning the funding of approximately US$18 million, needed to acquire Dalny Mine and to operationalise its Pickstone Peerless Gold project in Zimbabwe and fast track production.