HARARE- Crocodile skin producer’s acquisition of Dallaglio a mining company based in Zimbabwe, has received shareholder nod.

At an EGM in the capital Harare on Wednesday, Padenga shareholders voted in favour of acquisition of a 50.01% stake in Dallaglio whose past shareholders include LSE AIM listed Vast Resources.

The 50.01% stake was valued at close to USD $20 million, which will largely be settled in kind through the delivery of mining equipment of proportional value to Dallaglio.

Dallaglio’s underlying assets are 3 gold mining entities in Zimbabwe including Pickstone Peerless and Eureka.

Of the 3 mines, only Pickstone Peerless is in production. The mine was acquired by Dallaglio in 2014 and is an open pit mine with capacity to process upto 100000 tonnes of gold per month on 90% recovery.

Its underlying claims had a total measured and indicated resource of 9.1 tonnes and has potential for resource extension through new exploration drilling.

 The 584ha gold mine is located 100km south-west of Harare and has historically produced over 400,000oz gold. In 2018, Pickstone Peerless generated $26.7 million in turnover while netting a profit of $2.7 million after producing about 1.5 tonnes over the 12 months period.

The Eureka mine was acquired by Dallaglio Investments in April 2018. Dallaglio owns 95% of the company. The mine has been mothballed for the better part of the last 20 years, having closed in early 2000’s due to economic turbulences. The mine was reopened in June 2018 while the plant is expected to be commissioned by mid-2020 after extensive plant and infrastructure upgrade project.

The start-up is being funded by surplus cash from Pickstone Peerless Gold Mine and will be further funded by credit facilities that are in the course of being established. Eureka is a gold mine originally designed to produce up to 1.9 metric tonnes per annum from an open- pit operation.

The mine has 22.3 metric tonnes NI43-101 compliant Mineral Resource last evaluated in 2012.The mineral has an average head grade of 1.90g/t Au for 38.8 metric tonnes Au contained, of which 13.4 metric tonnes is an Indicated.

 On commissioning the plant will have a 100,000 tonnes processing capacity per month. Long term average gold production is expected to be in excess of 140 kgs/ month. It is expected that Eureka will be significantly more profitable than Pickstone Peerless due to lower stripping ratios and mining costs per tonne.

Prior to Dallaglio acquisition the mine was on care-and maintenance having been mothballed in early 2000’s before a falls start mid-way into the decade. Multiple work programmes have been undertaken post year end in preparation for restoring Eureka to production. Design plans for the mine and processing operation have been finalised, and it is planned that production should commence by the end of June 2020.

The giant mine was acquired in 2014. The claim has a total measured indicated resource of 9.8 tonnes and a total inferred resource of 13.2 tonnes.  It is short to medium term development opportunity.

Dallaglio Investments is composed of 2 investors namely Sub Saharan Goldia Investments and Grayfox investments owning 24,99% and 50.01% + respectively. The original shareholders are Vast (50%) and Grayfox Investments (50%) who controlled the vehicle in equal proportions around 2014.

Vast Resources is listed on the LSE AIM and has Diamond mining assets in Zimbabwe while having other mining interests in Romania. It recently divested from gold mining in Zimbabwe to focus on diamond mining.

Grayfox is a consortium of local investors who include founders of Innscor Africa a listed diversified investments holding company in Zimbabwe with interests in food processing and manufacturing sectors among others. Notably founder Michael Fowler is the current CE of Eureka.

 He is also a non-executive director of Padenga and a top shareholder. This partly explains why Padenga is going for gold and specifically under Dallaglio. Besides, the altered and present shareholding structure of Dallaglio, shows Grayfox, has an increasing controlling interest aftermath of Vast’s partial and subsequent complete divesture.

Sub Saharan Goldia Investments is a South African domiciled company and it became part of Dallaglio, when in 2017, Vast Resources sold almost 50% of its non-controlling interest in the investment vehicle to the former for a consideration of $4 million.

In April 2019 Vast Resources sold its remaining interest in Dallaglio to existing shareholders effectively ceding its interest in both Zimbabwe gold mines (Pickstone Peerless and Eureka) controlled by Dallaglio.

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