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A Canadian zinc mining company has bought part of Fiji’s Vatukoula Gold Mines.
Toronto-listed Canadian Zinc Corporation announced this week it had entered into a private agreement to acquire 347,669,022 ordinary shares of Vatukoula Gold Mines plc (VGM) for a consideration of around C$4,55,000 (F$8.3m).
“The shares acquired represent approximately 18.25 percent of the issued shares of VGM,” it said in a statement issued last week.
Canadian Zinc Corporation’s principal focus is its efforts to advance the Prairie Creek Mine, a zinc/lead/silver property located in the Northwest Territories of Canada, towards production.
While indicating the shares were purchased for investment purposes, Canadian Zinc said further purchase to increase shareholding was not ruled out.
The move follows a recent defiance by mining tycoon and 17 percent shareholder Walter Walter Berukoff at the company’s last annual general meeting, where he rejected the board's plan to raise money by issuing 600m new shares.
Berukoff reportedly called for a change of management or the company to be sold to an established mining company.
VGM is listed on the London Stock Exchange’s Alternate Investment Market, and recently went on a fundraising drive to raise capital equity. In a statement earlier last week, chief executive David Paxton said the company needed up to US$8 million to remove production bottlenecks and enable it to achieve its target.
The Vatukoula Gold Mine has an operational history of over 70 years during which time it is reported to have produced some seven million ounces of gold and over two million ounces of silver from the treatment of around 22,500,000 tonnes of ore.
Paxton announced production for the first quarter this year at 47,571 tonnes of ore mined, a drop from 67, 100 tonnes in the previous quarter. Out of this, a total of 7470 ounces of gold was produced, down from 10, 521 ounces in the previous quarter.
The mine has also concluded negotiations with the Fiji government to remove 25 per cent gross proceeds tax and fuel levy.
