adminBusiness Reporter
African Consolidated Resources Plc, an Alternative Investment Market listed gold mining company with significant interest in Zimbabwe, is undertaking a due diligence exercise with a major bank for $70 million to develop its Pickstone-Peerless resource.
“The company is pleased to inform shareholders that it is currently undertaking a due diligence exercise with a major African bank with which a term sheet was signed in 2013,” ACR said.
The term sheet provides for a $70 million debt facility to fully finance the expansion of the mine to 50,000 tonnes per month, subject to customary due diligence, credit committee approval and also to ACR securing equity for the initial plant construction.
The company is now engaging with a number of interested parties to raise $30 million for phase 1 construction as required by the term sheet as a pre-condition to debt-financing the project.
It is therefore also facilitating due diligence exercises with parties who have expressed bona fide interest in this respect.
ACR said a detailed indigenisation plan has been drafted and its submission to government is imminent and by regulation, the indigenisation authority has up to 45 days to approve or reject the compliance plan from the date it is submitted.
Cash balance at January 31, 2014 was $1,85 million (unaudited) and as reported in the interim results further funding will be required in the 2014 second quarter for ACR to both continue operating as a going concern and develop its Pickstone-Peerless project together with its portfolio of high impact assets.
Discussions are in progress in relation to additional equity funding. ACR group technical director Mike Kellow told international media that real success was that in 12 months it has gone from just a resource estimate to a pre-feasibility and a definitive feasibility.
In December, ACR undertook a pre-feasibility study on the wider Pickstone Peerless project, that assumed a mineable reserve of one million ounces of gold, which has since been firmed up to a 1,02 million ounce reserve grading 1,9 grammes per tonne.
Online Reporter