(Alliance News) - Shares in Alba Mineral Resources PLC rose on Tuesday after revealing it has agreed to take full ownership of the Clogau gold project in Wales.
Shares in the London-based mineral exploration company were up 15% to 0.19 pence each in London on Tuesday morning.
Alba said it has agreed to buy the remaining 10% interest in Gold Mines of Wales Ltd to take 100% ownership of the Clogau gold project.
It has also agreed to buy back a 3% net smelter return royalty owned by the vendor, reducing its royalty to 1%.
The project is situated within the Dolgellau Gold Belt in Wales. The company said that it comprises the Clogau gold mine, where Alba has identified a number of "highly prospective" gold targets through extensive exploratory drilling in 2020 and 2021, as well as a large number of gold targets and former gold workings outside of the footprint of the mine.
Under the agreement, Alba will pay GBP400,000 via the issue of 200 million of its shares at 0.2 pence each, plus 81.9 million two-year share warrants. This represents a 25% premium to its closing share price of 0.16p on Tuesday, being the last business day before the announcement.
Executive Chair George Frangeskides said: "It is a measure of our confidence in the long-term prospects for the Clogau gold project that we have taken the opportunity to move to 100% ownership of the project."
Further, the company said it has made "good progress" in support of its plan to dewater Llechfraith Shaft at the Clogau gold mine. Alba explained that this is necessary in gaining access to the Llechfraith Payshoot, one of its primary in-mine targets.
It also expects to submit an updated ecological/technical report and renewed permit applications in first half of September.
"The company remains confident that it will ultimately be successful in its bid to dewater the shaft," Alba added.
The company also said that its mineral exploration license for its 100% owned Limerick base metals project has been renewed for two further years to May 26, 2024. The project is situated in the Irish Zinc Ore Field, the location of a number of high-grade zinc-lead deposits, it added.
The license will cost Alba EUR38,087 by the end of December and a further EUR62,500 by its expiration date.
The company aims to start drilling in the area before the end of this year.
By Sophie Rose; sophierose@alliancenews.com
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Alba Mineral Resources (ALBA)