Tuesday, July 30, 2013

(NEWZIMBABWE) Aussie firm acquires two Zim gold mines
15/07/2013 00:00:00
by Business Reporter

AUSTRALIA-BASED Prospect Resources has agreed a deal to move into Zimbabwe’s gold sector, while also receiving a strong investment support strategic investors, including Blumont of Singapore.

In one swoop, Prospect will acquire a 70% stake in a Zimbabwe gold exploration company which owns 100% of one gold project and can mine a previously operating gold mine and raises $4.5 million with strategic investors.

The deal involves two projects that were historical producers of high-grade gold a mine. The first mine is located at Penhalonga in Manicaland province and used to produce about 185,000 ounces of gold at until closure in 1943.

Prospect will also be looking to revive Bushtick Gold Mine near Esigodini which produced around 470,000 ounces of gold until it was closed in 1950

The acquisition provides the opportunity to fast-track projects using historical data with potential to generate cash flows early.

And in tough market conditions Prospect has signed subscription agreements to raise A$4.5million at $0.012, conditional on shareholder approval, with $3.9 million of this subscribed for by a Singapore-based consortium including Blumont Group Ltd.

Prospect's 100% owned UK subsidiary has subscribed for new shares to the value of US$50,000 representing 70% of Hawkmoth Mining and Exploration (Pvt) Limited (HME).

HME has since entered into a exploration and mining agreement, providing HME the right to explore and mine at Bushtick Gold Mine and surrounding acreage including tailings dumps.

Analysts said this was an “interesting deal” and announcement for Prospect and a value enhancing one at that for a company capped at just $4 million before the deal.

While Zimbabwe is not without risks, Blumont's investment and involvement was also said to be “intriguing”.

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