Gold explorer ElDore Mining Corporation Limited (EDM) is pleased to announce that it has signed an agreement for a major gold mine acquisition that will see it establish a key strategic landholding within a major gold producing region and ultimately join the ranks of the country’s gold producers.
EDM has agreed to acquire the Lonely Gold Mine in Zimbabwe for an equivalent total consideration of US$4.4 million. The Company has executed a Heads of Agreement with the vendors to acquire a 100% interest in the Lonely Mine, subject to due diligence, regulatory and shareholder approval. The Lonely Mine, located 80km north of Bulawayo, has historical underground production of up to >1.1 million ounces of gold (Bartholomew, 1990). The Lonely Mine was the largest single gold producer in the region until its closure in the mid-1990s. The potential for recommencement of operations following completion of due diligence will be part of the Company’s expanded scope to determine the size and scale of operations and exploration prospectivity. The mine is located within the Bubi greenstone belt, which is a major gold producing region in Zimbabwe.
The total consideration of US$4.4million includes the tenements and all plant and equipment on site, which the Company believes will expedite re-commissioning of operations upon settlement. Settlement is due to occur following shareholder approval. The transaction is payable by way of EDM shares to the value of US$2 million and US$2.4million cash. The shares will be payable upon the following terms – US$1 million of EDM shares at settlement and US$1 million of EDM shares upon the first production pour of 20kg (643 troy ounces) of gold poured. The cash component is payable in two installments upon the following terms – US$500,000 at settlement and the US$1.9million balance will be payable from production.
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