Alba Mineral Resources buys another 41pc of Clogau project

The AIM-traded firm said that, subject to completion, it would thereby move to 90% ownership of the Clogau Gold Project situated within the Dolgellau Gold Belt in Wales.

As it had previously announced, the project comprises the Clogau Gold Mine and includes a large number of highly prospective gold targets and former gold workings, within a total option area of 106.94 square kilometres.

It said the remaining 10% of the project would be free carried to commercial production, but would be subject to a put-and-call option effective from the grant of planning permission, enabling Alba to move to 100% ownership in the future if so desired.

As part of the transaction, the vendor agreed to assign to Alba in full the approximately £1m in loans owed to it by Gold Mines of Wales.

Alba said the consideration payable for the acquisition would be 185,714,285 Alba consideration shares, valuing the total consideration at approximately £0.65m, as well as a one-for-three Alba share warrant.

The Alba consideration shares would be subject to a seven month lock up.

Alba also said it had agreed to grant a 4% net smelter return royalty to the vendor, subject to a buy-back right in respect of any proposed future sale of the royalty.

It said its objective remained to bring the Clogau Gold Mine back into production, and also to make a push into the regional exploration of the wider project area.

“For the first time in many years, the Clogau Gold Project is moving to the majority ownership of one company,” said executive chairman George Frangeskides.

“This will allow us more readily to progress the plan for re-opening the Clogau Mine, as well as making a push into regional exploration of the extensive and under-explored Dolgellau Gold Belt.

“We will not be depleting the company's cash reserves with this proposed acquisition, and the shares that will be issued on completion will be subject to lock up and orderly marketing restrictions for a seven-month period.”