ACR seeks funding for Zim mine


HARARE – AIM-listed African Consolidated Resources (ACR) says negotiations with potential investors are at an advanced phase for possible funding for its Pickstone-Peerless gold mine in Zimbabwe.

The miner, which unveiled the results of the definitive feasibility study (DFS) for the project yesterday, said the study reveals the robust economics of the operation, which will generate earnings before tax and depreciation of $26 million after three years and $54,8 million after six.

This assumes gold prices of $1,250 and $1,350 in 2014 and 2015 respectively and $1,500 an ounce thereafter.

The DFS ascribes a net present value to this, the first phase of the Pickstone project, of $17,7 million at a 10 percent discount rate, while the initial funding requirement is put at $15,7 million.

The all-important cash costs are $742 an ounce, or an all-in $886 including royalties and tax.

ACR’s chief executive, Craig Hutton, said the completion of the DFS on time and on budget represents a significant achievement in the transformation of the company from an exploration company to a mining company.

“I should like to emphasise that the DFS relates to the oxide cap only, just one component of the much larger Pickstone-Peerless Gold project, and will support the funding of the much larger and higher grade sulphide ore outlined in the preliminary economic assessment,” he said. Hutton noted that restricting phase one to the oxide cap reduces the capex that would otherwise be necessary and enables us to use plant facilities already in place.

“We have increased the funding requirement for phase one principally to stockpile ore for four months to maximise early grade,” said Hutton.

The initial plan is to focus on the oxide cap of the 3,2 million ounce resource in order to generate near-term cash flow at low capital cost.

The results were based on a maiden reserve of 136,000 ounces, just 17 percent of the mining inventory.

However, the plan eventually is to develop a far bigger mining operation targeting one million ounces.

In the meantime, phase one remains on track for first production of gold in June next year.

At the same time work on the pre-feasibility study for the more ambitious second phase is in progress. This study is expected to be complete in September or October 2013.

ACR is an AIM-listed multi-commodity resource development company focussed on Zimbabwe.

The Company has been active in Zimbabwe since 2004 and has utilised its first mover advantage to establish a formidable balance sheet of world class assets at various stages of development.

With over 12 key projects covering gold, nickel, platinum, copper, phosphate and diamonds, the Company is focussed on developing these important strategic assets for the benefit of all stakeholders.


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