UK-based exploration firm Vast Resources has acquired a 23.75% economic interest in the Eureka gold mine in Zimbabwe.
The deal was made possible following the acquisition of a 95% interest in Eureka mine’s current holder Delta Gold Zimbabwe by Dallaglio Investments, which is 25.01% owned by Vast.
Dallaglio now holds 95% interest in the mine following the $4.485m acquisition agreement.
Funding for the transaction was arranged via a loan from Sub-Sahara Goldia Investments (SSGI), which owns an effective 24.99% interest in Dallaglio.
Vast Resources chief executive Andrew Prelea said: “We are extremely pleased to announce the first new acquisition together with our strategic partners in Zimbabwe for many years.
“This demonstrates our continued belief in Zimbabwe and the ability to find robust assets to add to the Vast portfolio.
“We believe this to be a highly attractive acquisition target given the size of the resource and level of investment in equipment made to date, and I look forward to providing updates regarding development and commissioning at Eureka in the coming months.”
The transaction will also see Dallaglio offer a $1.8m financing package to Delta Gold in order to meet the company’s current creditor commitments.
Delta previously invested a historic amount of $30m at the Eureka site.
The mine was originally intended to achieve production levels of up to 70,000 ounces (oz) of gold (Au) per year from an open-pit operation.
Eureka is currently undergoing a care and maintenance programme, while plans have been outlined to restart production from the site in the near future.
The acquisition also provides Vast with access to a 1.8 million tonnes per annum (Mtpa) in-situ processing plant and associated infrastructure.
The mine has an indicated mineral resource of 13.4Mt at an average grade of 1.78 grams per tonne (g/t) of Au for 1,081,700oz Au.