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Canadian Zinc, a Canadian mining company with a recently-acquired significant shareholding in Fiji’s Vatukoula gold mine is eyeing the Tuvatu gold project, announcing it has entered into a $3.4million option agreement with its owner.
“The Tuvatu project is currently owned by American Eagle Resources, Inc. through its 100 percent owned Fijian subsidiary, Lion One Limited, the holder of the special prospecting licences and the special prospecting licence application comprising the Tuvatu property,” said Canadian Zinc.
“Canadian Zinc has entered into an option agreement with Laimes Global Inc. (LGI), the majority shareholder of American Eagle, and has made an option payment of C$1.8 million (F$3.4million) to LGI.
“Pursuant to the option agreement, Canadian Zinc has the option, at any time prior to October 30, 2009, to require LGI to support the acquisition by Canadian Zinc of the Tuvatu property, via an amalgamation of American Eagle with a wholly owned subsidiary of Canadian Zinc, under which an aggregate of 16,250,000 common shares of Canadian Zinc would be issued to the former shareholders of American Eagle,” the statement said.
“Canadian Zinc has also entered into a voting support agreement with Red Lion Management Ltd, another significant shareholder of American Eagle, pursuant to which Red Lion has agreed to vote in favour of the amalgamation.”
The announcement follows last month’s move by Canadian Zinc to buy more than 20 percent of Vatukoula gold mine, making it a significant shareholder.
Canadian Zinc’s chief operating officer Alan Taylor told FijiLive the Vatukoula Gold Mine (VGM) needed a capital injection to upgrade and optimise its along with continuing with exploration to define further reserves and resources.
“The plan is to raise such funding in order to initiate and carry out a long term mine plan that will carry a viable operation well into the future,” Taylor told FijiLive.
VGM, he said, had successfully raised £3.804 (F$12.4 million) through the private placement of additional new shares, funds that will be used to buy additional refurbished underground dump trucks and underground loaders, more reliable power generating capacity and spare pumping capacity.
The Tuvatu project tenements were previously held by Australian-listed Emperor Mines Ltd (EML), which owned Vatukoula before the mine was taken over by African-owned miner Durban Roodepoort Deep in 2006.
During the option period, Canadian Zinc has agreed to maintain the Tuvatu property in good standing and continue with the current exploration program at an estimated cost of around C$500,000 (F$948,819).
