RioZim says to use own funds to buy Falgold’s Dalny Mine

RioZim says to use own funds to buy Falgold’s Dalny Mine

HARARE, February 23 (The Source) – RioZim says it will use internal funds to finance the purchase of Falgold’s Dalny Mine for $8 million, after the transaction was approved by shareholders at a meeting on Thursday.

The resources group, which already owns and operates two other gold mines — Renco near Chiredzi and Cam and Motor in Kadoma — says the acquisition of Dalny Mine will double RioZim’s Net Asset Value from $4,4 million to $9,5 million.

Chief executive Bekhi Nkomo told The Source after RioZim’s extraordinary general meeting that the miner was in a sound financial position and would not be taking up any new debt to finance the transaction.

Last January, RioZim cleaned its books by selling off nearly $34 million of its short-term debt to the Zimbabwe Asset Management Corporation (Zamco), a special purpose vehicle set up by government to purchase non-performing loans from banks.

“We are financing the deal internally, remember Cam and Motor reopened and our revenues are starting to pick up. The figure that is required is an amount we can pay internally,” he said.

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 will also assume Dalny’s liabilities of $2,2 million.

DMC gold processing plant has a minimum capacity of 500 tonnes of ore per day which Nkomo said would be doubled in the second year.

In 2015 RioZim leased Dalny Processing Plant to process ore mined from its Cam and Motor Pit which saw gold production increasing by 76 percent in the first half of 2016.