ALTERNATIVE Investment Market-listed resource development company, African Consolidated Resources (AFCR), is finalising a debt facility with a financial institution to fund the expansion of its gold mine at Pickstone-Peerless in Kadoma.
BY KUDZAI CHIMHANGWA
The company has established a formidable balance sheet of assets at various stages of development and focuses on 12 key projects covering gold, nickel, platinum, copper, phosphate and diamonds.
AFCR, which has been active in Zimbabwe since 2004, is currently undertaking a due diligence exercise with a major African bank with which a term sheet was signed in 2013.
“The term sheet provides for a debt facility to fully finance the expansion of the mine to 50 000 tonnes per month, subject to customary due diligence, credit committee approval and also to AFCR securing equity for the initial plant construction,” the company said.
The company is now engaging with a number of interested parties to raise US$30 million for Phase 1 construction, as required by the term sheet as a pre-condition to debt-financing the project.
AFCR is also facilitating due diligence exercises with parties who have expressed bona fide interest in this respect.
A preliminary economic assessment report in December 2012 estimated a net present value on an 800 000 ounces open pit at Pickstone of US$300 million at a 10% discount rate, a major factor that demonstrated the substantial potential value of the project.
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The company noted that further funding would be required in the second quarter of 2014 in order for AFCR to both continue operating as a going concern and develop its Pickstone-Peerless Gold project together with its portfolio of high impact assets.
“Discussions are in progress in relation to additional equity funding,” the company said.
AFCR said a detailed indigenisation plan had already been drafted and its submission to the relevant Zimbabwean authority was imminent. By regulation, the indigenisation authority has 45 days to approve or reject the submission from the date of submission.
