Business

New investor underlines mine potential: Broker

By RACHNA LAL and     PROACTIVE INVESTORS A British stockbroker, WH Ireland (WHI), believes the investment in Vatukoula Gold Mines by Chinese firm Xintai, is a big vote of confidence
04 Sep 2012 12:23

By RACHNA LAL and
    PROACTIVE INVESTORS

A British stockbroker, WH Ireland (WHI), believes the investment in Vatukoula Gold Mines by Chinese firm Xintai, is a big vote of confidence in the gold miner.
Xintai will invest £10.3 million (FJ$29.44m) in Vatukoula for the issue of 20 million new ordinary shares at a 60 per cent premium to the market price at the time of the deal.
The broker told Proactive Investors the agreement reinforces its belief in Vatukoula going forward.
“This is especially as it improves production flexibility as its Emperor Gold Mine in Fiji,” WHI said.
“Development in the Prince William and Dolphin ‘flatmake’ ore bodies will improve tonnages and grade to the mill and lower unit operating costs.”
Vatukoula intends to use the proceeds to fund the underground development and the improved access to higher-grade zones, while a partner of Xintai, China Gold Science and Technology Limited, will provide research and technological expertise.
They are expected to bring significant environmental, technical and economic resources to the project.
WHI said the deal was very positive for Vatukuola and reiterated its ‘buy’ recommendation.
Vatukoula Gold Mine said the net placing proceeds would be added to working capital and used towards a number of key strategic objectives including the Vatukoula mine’s ongoing development and capital investment programme.
This programme would allow the mine to increase production to a sustainable and profitable level.
Xintai’s involvement with the company is expected to bring new expansion opportunities at the Vatukoula property.
It would mean the board would be able to consider a wider range of growth opportunities than those that were previously available to it.
Vatukoula Gold Mine chief executive, David Paxton, said Xintai’s strategic investment was a significant step for them.
“It is not only a vote of confidence in the Vatukoula Gold Mine but it puts the company on a sound financial footing for the expansion of the mine,” he said.
“It allows us access to further technical expertise through Xintai’s technical partners CGST.”
Xintai chief executive, Dinglu Wang said: “I believe that Vatukoula represents an excellent investment opportunity because of the potential that the mine in Fiji represents and its strong board and management.
“Shareholders will benefit from our co-operation, which will combine complementary experience and skills to further develop the Fijian assets.”




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