African Consolidated Resources had mixed news as it abandoned its acquisition of the Dalny Mine but found a partner for Pickstone-Peerless, both in Zimbabwe.
The explorer could not raise the US$12mln needed as a pre-condition of its agreement to acquire Dalny in Zimbabwe, though termination of the agreement will see AFCR reimbursed for US$0.5mln of the initial payment of US$1mln.
AFCR added that it had agreed a joint venture with a local partner that will enable Pickstone-Peerless to move into production.
The agreement, which is non-binding, will see its interest in Pickstone-Peerless and Gadzema transfer to a jointly owned company controlled by AFCR.
The unnamed new partner will inject US$4 mln cash for a 50% equity holding in the venture, which may also involve an option of conversion into shares of AFCR.
That should be sufficient to commence production at Pickstone-Peerless within eight months at a provisionally targeted run-rate of ore production of 10,000 tonnes per month.
As part of the joint venture arrangements, provision has been made for compliance with Zimbabwe’s indigenisation laws.
The partner has also provisionally agreed to make a US$2 mln loan facility to AFCR at an interest rate of 1% per month.
Roy Pitchford, AFCR’s chief executive, said, “Raising new investment finance for Zimbabwe has proved extremely difficult and I am very pleased to have secured funding in principle on a joint venture basis with a view to commencing production at Pickstone-Peerless.
“The success of this joint venture will encourage further investment to expand operations at Pickstone-Peerless and in future at the Giant Mine.”
– proactive investor