ASX-listed Luiri Gold has entered into a binding sale agreement with Africa-based mining contractor Bamboo Rock to sell its 100% ownership of the company’s Mauritian located subsidiaries that hold the Luiri Hill Gold Project in Zambia, worth approximately US$520 000
The company’s Luiri Hill Gold Project currently consist s of two large scale mining licenses, covering a total area of 277 km2. The tenements have a 25 year renewable term with all necessary rights to commence mining. An independent feasibility study centred on re-opening the Dunrobin open cut mine and building a processing facility at Dunrobin was completed in November 2013.
In December 2013 the company entered into a Heads of Agreement with Bamboo to sell 75% of the Mauritian holding companies with Luiri retaining a 25% contributing interest. Since then, both Luiri and Bamboo have investigated various development alternatives and funding options. Bamboo has recently entered into several contracts and term sheets to finance the purchase of mining equipment, the process plant construction and for development working capital to establish the Dunrobin gold mine and to commence production.
After considering the financial commitments attached to these contracts and term sheets, Luiri has now formed the view that it would not be able to fund its share of development capital to maintain a meaningful interest in the tenements in a way which would not be prohibitively dilutionary to existing shareholders.
Accordingly Luiri has, subject to shareholder approval, negotiated a sale of its entire interest in the Mauritian holding companies.
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