Shares of the AIM-traded River Diamonds (RVD.L) mounted up, following an announcement that the company is ready to raise £4.7m through a placing to acquire the Vatukola Gold Mine in Fiji.River currently has a 19% stake in the mine through its 20% ownership Viso Gero International (VGI), which owns 94% of Vatukola's owner Westech Gold.
River is planning to issue 77.8m shares at 6p each so it can acquire the remaining 80% of VGI. VGI has agreed to buy the remaining 6% of of Westech prior to being bought by River, meaning River will own 100% of the mine.
River, which began as a diamond miner focused on Brazil and Sierra Leone, said that the Vatukola Mine will be its principal operation once it is acquired. It (Frankfurt: A0MLX5 - news) expects to complete the acquisition by April 1.
"The acquisition of the Vatukuola Mine provides River Diamonds with the opportunity to bring this historic gold mine back to profitability at a time of high prevailing gold prices," River chairman Colin Orr-Ewing said. "We believe this will bring benefits not only to River Diamonds' shareholders, but also to the Fijian Government, the employees at the mine and the people of Fiji."
It contains 1.23m tonnes of proven gold reserves and 1.1m tonnes of probable reserves. It also has a 700,000 tonne a year processing facility, a 20.5 megawatt power station and equipment such as support trucks and dump vehicles.
The share price looks as if it is bouncing back after a crushing slip.
Full year losses widened and revenue more than halved at River Diamonds in 2007. The firm, whose shares were suspended not that long time ago, posted a loss of £982,111 for the year to 31 August 2007, out from £924,783 in 2006 on turnover down to £28,106 from £67,429. Income came from the hire of plant and equipment to contractors in Brazil.
Based on the facts we have today, I think there is great potential in the company. Given the current gold price rush, there could be some more positive developments in the future for the company. It is an experienced gold digger and I reckon it would be a great chance to feed your portfolio.
Reference
Based on the facts we have today, I think there is great potential in the company. Given the current gold price rush, there could be some more positive developments in the future for the company. It is an experienced gold digger and I reckon it would be a great chance to feed your portfolio.
Reference
www.riverdiamonds.co.uk
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