Chinese Buy Stake In Fiji Gold Mine (May 2013)


Source: – Chinese buy stake in Fiji gold mine

Notable excerpts:

The share price of Fiji’s only gold mine has jumped 9.2 per cent on the London Stock Exchange after it was disclosed a Chinese energy operation was taking a big holding in it.

Vatukoula Gold Mine Plc (VGM) operates a mine in the northern part of Fiji’s main island Viti Levu. The producing gold mine has 4.2 million ounces of mineral resources and 790,000 ounces of mineral reserves.

In a statement to London’s AIM market Vatukoula said Chinese oilfield service group DRK Energy Co Ltd had entered a deal to subscribed to 30 million new ordinary shares in Vatukoula at 15 pence (NZ27 cents) per share to raise £4.5 million (NZ$8.4m).

This represents 19.2 per cent of the shares on offer.

The news saw Vatukoula shares jump 9.2 per cent to 11.88p but it is still significantly off its high 43.6p in August last year.

DRK and Vatukoula have agreed to work together to source the required debt financing to fund a planned expansion programme.

If VGM enters into a US$40m (NZ$49m) debt-financing package facilitated or introduced by DRK within the next 120 days, DRK will have the option to acquire another 24 million shares at 15p.

DRK would then hold approximately 29.9 per cent of the enlarged issued share capital.

The mine has had a troubled history which saw it caught up in the 2006 military coup.

As the coup unfolded its then owner, Emperor Gold Mines, a subsidiary of South African Durban Roodepoort Deep Gold Ltd, announced it was closing down, and military strongman Voreqe Bainimarama sent soldiers to seize the mine.

It reopened in 2008 and has since been producing gold.


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