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VSA CAPITAL MARKET MOVERS - Tectonic Gold

Published: 09:05 18 Feb 2019 GMT

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VSA Morning Miner, 18/02/19

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Tectonic Gold (LON:TTAU)

Tectonic Gold (TTAU LN) has announced an agreement with VAST Mineral Sands to acquire an interest in diamond mining concessions in South Africa. TTAU will gain a 50% economic interest for US$650k paid in TTAU shares at a price of 2.2p/sh a significant premium to the current share price of 0.5p and a 10% premium to the listing price in June 2018. TTAU has indicated that it is likely to require additional working capital to fully fund the venture and the enlarged group although the diamond concession is targeting immediate cashflows. TTAU intends to use cashflows to fund ongoing exploration at its core Australian gold exploration projects.

VAST, a private South African company, has interest in minerals sands and diamond concessions. The Alexkor concession into which TTAU is acquiring an interest overlies an 80km stretch of beach in north western South Africa. The Alexkor mine is owned by the SA Government and VAST has a ten-year concession to mine the beach areas as well as process the tailings and slimes from the Alexkor mine which has operated since 1928. This is a free dig operation with no drilling or blasting required. With regard to the tailings VAST has an agreement to dig and process the tailings with revenues after treatment costs and royalties split 80/20 between VAT and Alexkor.

VAST intends to commence alluvial mining of the beach area close to the Orange River, a well-known area for alluvial diamond extraction. De Beers borders the concession to the south at its Kleinzee operations. VAST anticipates contained diamond resources in the concession of around 500kct with an indicative average value of US$450/ct. Production is targeted at an initial 900ct per month.

 

 

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