22nd Jul 2016 08:56
LONDON (Alliance News) - Ferrum Crescent Ltd on Friday said it has secured an extension to the option it holds to acquire GoldQuest Iberica SL until the end of August to allow the sellers to resolve certain outstanding administrative issues.
Ferrum signed an option and sale agreement back in February, giving it the exclusive right to fully acquire GoldQuest, which is being targeted by Ferrum for the Toral and Lago exploration projects that it holds in northern Spain.
The option has been extended until the end of August at no cost to Ferrum and has been agreed because the current owners of GoldQuest, TH Crestgate GmbH, need to finalise the settlement and documentation of certain administrative issues and an historic back-in right over the Toral licence area held by Lundin Mining Corp, Ferrum said.
"Whilst this delay is clearly frustrating, it is a very common situation in such international transactions, and we are working closely with Crestgate and its major shareholder, Mineral & Financial Investments Ltd, to conclude the transaction as swiftly as possible," said Chairman Justin Tooth.
"I am confident that Crestgate can resolve the remaining items expeditiously to enable us to proceed to exercise our option and commence work on these attractive exploration projects, with the fundamentals for the zinc market, in particular, continuing to look excellent," he added.
The company is expecting to close the deal in the third quarter but said there could be another extension, should both parties agree.
Ferrum is aiming to re-examine the potential of the lead and zinc projects to understand the potential size and processing characteristics of the material within both assets.
The London-listed miner's other major focus is the Moonlight iron ore project in South Africa where it is looking to minimise development costs. Ferrum is examining lower-cost capital expenditure development options with potential partners utilising alternative methods for the transportation of concentrate other than a pipeline.
"The quarter under review has been extremely productive. In respect of our Moonlight project in South Africa, we have commenced a new process seeking to determine its true potential as a viable high-grade iron production source. A series of initiatives are underway including assessing potential development partnerships, offtake discussions and talks aimed at securing interesting historic data sets on the project," said Tooth.
Ferrum shares were trading down 14% to 0.240 pence per share on Friday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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