River Diamonds raises £4.7m to buy Fiji gold mine
LONDON: River Diamonds is to raise £4.7m (K28.2 million) through a placing to acquire the Vatukoula Gold Mine in Fiji.
River currently has a 19% stake in the mine through its 20% ownership Viso Gero International (VGI), which owns 94% of Vatukola’s owner Westech Gold.
River is issuing 77.8m shares at £0.06 each so it can acquire the remaining 80% of VGI.
VGI has agreed to buy the remaining 6% of Westech prior to being bought by River, meaning River will own 100% of the mine.
River, which began as a diamond miner focused on Brazil and Sierra Leone, said that the Vatukola Mine will be its principal operation once it is acquired. It expects to complete the acquisition by April 1.
“The acquisition of the Vatukoula Mine provides River Diamonds with the opportunity to bring this historic gold mine back to profitability at a time of high prevailing gold prices,” River chairman Colin Orr-Ewing said.
“We believe this will bring benefits not only to River Diamonds’ shareholders, but also to the Fijian government, the employees at the mine and the people of Fiji.”
The Vatukoula mine, which is on Viti Levu, one of Fiji’s two main islands, has operated at a loss for the past three years, due to high operating costs and low gold prices compared to those of today.
It contains 1.23m tonnes of proven gold reserves and 1.1m tonnes of probable reserves. It also has a 700,000-tonne a year processing facility, a 20.5 megawatt power station and equipment such as support trucks and dump vehicles.
It was only recently that River Diamonds began increasing its interests in gold mining. – PNS
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