AIM- listed junior miner, Vast Resources says it now holds 23.75 percent interest in Guruve-based Eureka Gold Mine which can produce 70 000 ounces per annum mine, expanding its asset base in the southern African country.
This follows the acquisition of a 95 percent interest in Eureka by its Zimbabwe subsidiary, Dallaglio Investments in which it holds a 25.01 percent interest.
The $4.485 million purchase price is financed by a loan from Sub-Sahara Goldia Investments (SSGI) to Dallaglio.
Vast and SSGI jointly control 50 percent of Dallaglio.
“It’s the first of what we hope will be many of the new acquisitions of the company using (SSGI), our joint venture partners as financiers for new acquisitions so we haven’t had to go to shareholders,” chief executive Andrew Prelea told Proactive Investors’s Stocktube channel.
“What we are trying to achieve is to acquire more assets without having to go to the shareholders for further dilution (for) near term production and high value assets were we are buying them quite cheap in Zimbabwe and Romania.”
Vast Resources, which was in a 50:50 partnership with a consortium of Zimbabwean investors Grayfox Investments in Pickstone and Peerless gold mine in Chegutu, last January sold 49.99 percent of its shares in the local operation to SSGI for $4 million to minimise exposure to the economic uncertainty in the country, including the possible impact of bond notes.
Eureka is an open pit operation currently on care and maintenance but can resume production quickly.
“It’s a great resource and it was operational in the 90s and the early 2000s and it had over $30 million of investment into it and luckily it has been under fantastic care and maintenance, it all looks brand new,” said Prelea, who took over as chief executive at the start of the year.
“It’s a wonderful asset and it has capacity of up to 70 000 ounces or potentially more. They used a relatively cheap process, we believe using a grinding and milling process similar to what we are doing at Pickstone is a better way to go so we will be investing into it to make sure we will be getting into production. But it’s a wonderful asset, one of many.”
“The knowledge we have accumulated from our operations at Pickstone Peerless is invaluable in assessing the true value of dormant mines such as Eureka, that can be brought in to commercial production in the near term,” Prelea added in a statement.
Vast also has mining projects in Romania.- The Source