(Alliance News) - Arc Minerals Ltd is to focus on Zambian copper projects, it said on Wednesday, after agreeing to sell Casa Mining Ltd.
Arc will dispose of its 99% stake in Casa Mining to Century Capital Management Ltd in a deal which could reach a value of USD9.8 million. Casa Mining owns 74% of the Akyanga gold deposit in the Democratic Republic of the Congo.
Century Capital is paying USD1.8 million upfront. If it increases the mineral resource at Akyanga to six million ounces within five years Century Capital Arc will get a further USD2.5 million. A further USD2.5 million would come if the resource reaches nine million ounces, and another USD3 million if it passes 12 million ounces.
The current inferred resource at Akyanga stands at three million ounces of gold, Arc said.
Arc Chief Executive Nick von Schirnding said: "This is a major strategic milestone for Arc. The transaction brings significant cash resources to Arc and at the same time removes ongoing operational expenditure.
"Crucially, it allows us to focus on our exciting Zambian copper development where we are making excellent progress both on drilling and commercially developing our plant. I am delighted to have Century acquiring Casa - we have been working closely with Century over the past few months and I am encouraged by their future plans for the project."
"Excitingly for Arc, we have significant further upside potential as Casa grows in size. As I have set out many times, we are clear on our vision in turning Arc into a focused copper play - this is a major step forward and we will continue all efforts to dispose of the remaining non-core gold interest, namely Sturec in Slovakia," von Schirnding continued.
As well as Misisi, which holds Akyanga, and Sturec, Arc's portfolio includes the Zamsort copper-cobalt project in Zambia.
Shares were 2.6% lower on Wednesday morning in London at 2.80 pence apiece.
By George Collard; georgecollard@alliancenews.com
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Arc Minerals (ARCM)