HARARE, October 17 (The Source) – Resources group RioZim says it has reached an agreement to buy Falcon Gold’s Dalny Mine, which has been under care and maintenance since 2013.
The agreement involves the purchase of Falgold subsidiary, Palatial Gold Investments which owns the Dalny Mine Complex. The complex includes the mine, a gold processing plant, several surrounding gold claims as well as equipment and a mining compound.
RioZim has been leasing the complex under a nine-month agreement signed in April.
The two miners did not disclose the financial details of the agreement but back in 2014, Falgold sold Dalny mine to African Consolidated Resources (AFCR) for $8 million. The deal collapsed after the UK-based miner failed to raise the funds.
Falgold is 84,7 percent owned by Canadian-listed New Dawn Mining Corporation.
“The Directors of RioZim believe that DMC has attractive exploration ground with potential for delineating resources for mining,” the two companies said in a joint statement.
“The acquisition of Palatial Gold is in line with RioZim’s strategic initiative to consolidate gold assets and output under RioGold through mergers/acquisitions in order to expand its gold operations.”
RioZim also owns Renco gold mine near Chiredzi.
Dalny Mine produced 6,034 ounces of gold in the nine months to September 2013 before it was shut down.
RioZim reopened its Cam & Motor in April last year and has been processing the gold from the open cast operation at the DMC.
The sale of Dalny will bring relief to Falgold, which earlier this year said it had fallen on hard times and could close operations permanently due to the current lack of profitability and the economic viability of its mines.
The deal will also throw a lifeline to the majority of the 900 workers who were sent home without pay when Dalny Mine was closed.
In June last year, Falgold also sold off the majority of its shareholding in Venice Mine near Kadoma. It still owns Turk Mine near Bulawayo and the Golden Quarry Mine in Shurugwi.
“On the other hand, the disposal of Palatial Gold by Falgold will allow Falgold to rationalise its asset base and focus on the mining efforts of the group,” said the miners.
RioZim and Falgold said they were in the process of fulfilling conditions precedent to the transaction.