https://www.engineeringnews.co.za

Dundee Precious Metals to sell Kapan

2nd March 2016

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

Font size: - +

JOHANNESBURG (miningweekly.com) – TSX-listed international gold mining company Dundee Precious Metals (DPM) has entered into a definitive agreement to sell its Armenia-based Kapan mine to Polymetal International for $25-million and a 2% royalty deal.

In an update to shareholders, the Canada-based group said the proceeds from the disposal of its operating asset would be used to strengthen DPM’s balance sheet and redirect future capital requirements to its remaining core assets.

“DPM will continue to maintain a presence in Armenia through joint venture arrangements in respect of certain exploration assets in the central part of the country,” said DPM president and CEO Rick Howes.

The Kapan operation, which DPM acquired in 2006, produces copper and zinc concentrates containing gold and silver.

While the sale was estimated to reduce DPM’s gold and copper output by 15% and 5% respectively, it eliminated high-cost production from the group’s portfolio and enabled the miner to increase its focus on a core portfolio of assets.

DPM’s principal operating assets included the Chelopech operation, in Bulgaria, and the Tsumeb smelter, in Namibia.

DPM also held interests in a number of developing gold properties in Bulgaria, Serbia and northern Canada, including the Krumovgrad project and interests held through its 50.1% owned subsidiary, Avala Resources, as well as its 11.8% interest in Sabina Gold and Silver Corp.

Meanwhile, Polymetal CEO Vitaly Nesis said that his company believed the acquisition of Kapan mine would result in the development of a profitable regional processing hub with sizeable production, which would provide a strong operating platform for Polymetal to pursue further opportunities in Armenia.

In terms of the agreement, Polymetal would pay $10-million in cash and issue $15-million in shares, in addition to a 2% net smelter royalty on future production from the Kapan property, which was capped at $25-million.

Edited by Creamer Media Reporter

Comments

Showroom

Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 
SBS Tanks
SBS Tanks

SBS® Tanks is a leading provider of innovative water security solutions with offices in Southern Africa, East and West Africa, the USA and an...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.122 0.185s - 156pq - 2rq
Subscribe Now