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AFCR looks to first gold at Pickstone Peerless with new financing

Published: 15:16 17 Oct 2014 BST

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African Consolidated Resources (LON:AFCR) has struck a joint venture agreement with Grayfox Investments to see its flagship Pickstone-Peerless gold project in Zimbabwe financed to first production.

AFCR will transfer its interest in Pickstone-Peerless and in the Giant Mine to a jointly owned firm, which AFCR will  control and into which Grayfox will pump US$4 million in cash for a 50% stake.

African's chief executive Roy Pitchford told investors: "As I stated on 30 September, raising new investment finance for Zimbabwe has proved extremely difficult.  

"I am delighted that finance for Pickstone-Peerless has now been achieved.  We can finally look forward to active gold production in Zimbabwe in the short term and the positive cash flow that should follow from that."

AFCR believes the finance will be sufficient to kick of f production at Pickstone-Peerless within eight months at a provisionally targeted run-rate of ore production of 10,000 tonnes per month.

Grayfox has also agreed to  grant a US$2mln loan facility to African Consolidated, secured on its 50% holding in the new firm.

If drawn down by the company, it will be used US$1 million for working capital on the group's projects in Romania and US$1 million for general corporate purposes.

The 50% stake in Newco held by Grayfox may at its election be converted into around 288.3mln shares at any time within eighteen months from the date of signature of the joint venture.

The 584 hectare Pickstone-Peerless Gold project lies 100km southwest of Harare and has historically produced over 400,000 ounces gold. 

Pickstone-Peerless has a current JORC resource of 62 million tonnes grading 1.8 g/t, containing 3.56 million ounces of gold.

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