Oliver Kazunga, Senior Business Reporter
THE Competition and Tariff Commission (CTC) has approved the acquisition of Palatial Gold Investment by Rio Gold, marking the conclusion of the transaction.
Rio Gold is a subsidiary of resources group RioZim Limited while Palatial Gold Investments was wholly owned by Falcon Gold (Falgold).
In a joint notice, RioZim and Falgold confirmed the approval of the transaction by the CTC.
“Following the unanimous support by the shareholders of RioZim and Falgold, we are pleased to announce the approval of the transaction by the CTC.
“The fulfilment of these conditions precedent marks the successful conclusion of the transaction, subject to the terms and conditions contained in the agreement,” said the parties.
Palatial Gold owns the Dalny Mine Complex (DMC), which consists of a gold processing plant, equipment, mining, claims, mining infrastructure and a mine compound.
DMC has been under care and maintenance since August 2013.
From March 2015, RioGold has been processing ore mined at its Cam and Motor Mine at the Dalny Mine Gold Processing Plant under a lease agreement.
RioZim believes the acquisition of Palatial Gold will consolidate its gold assets and output under RioGold as the acquisition was in line with the group’s strategic initiative to expand gold mining operations.
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.
Falgold, which is listed on the Zimbabwe Stock Exchange, envisages its turnaround hinged on proceeds from the sale of Dalny Mine, one of the group’s operations.
In 2014, AIM-listed African Consolidated Resources cancelled plans to acquire Dalny Mine from Falcon Gold after failing to raise $12 million that constituted a pre-condition of the agreement to own the Kadoma-based gold mine.
The news was a blow to Falgold that had hoped to use the cash from the sale to breathe life into its waning operations.
Proceeds of the Dalny Mine sale should enable the enhancement of the various projects and that will see the mining group returning to viability as it may accelerate mining projects and fund other new investments.