(Alliance News) - Arc Minerals Ltd said Thursday it has terminated agreement with Century Capital Management Ltd to sell its interest in Casa Mining Ltd, situated in the Democratic Republic of Congo.
Arc Minerals shares were trading 7.3% lower in London at 2.87 pence each on Thursday.
The company said the reason for termination was than an updated legal title opinion was not able to be completed by the long-stop date.
"However, the company's title opinion, that has been independently audited, confirmed that all Casa title issues were in good order, which was provided to Century," Arc Minerals said.
Arc Minerals had agreed to sell 99% stake in Casa Mining, which owns 74% of the Akyanga gold deposit, to Century Capital in November, in a deal worth up to USD9.8 million.
Century Capital agreed to pay USD1.8 million upfront. If it increases the mineral resource at Akyanga to six million ounces within five years, 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 company said it has now commence discussions with interested parties and is confident about selling Casa Mining.
Nick von Schirnding, executive chair, said: "While it is naturally frustrating not to be closing this transaction with Century, the sales process has elicited further interest from a number of third parties who we were precluded from engaging with."
"We have as of today commenced discussions with these interested parties. In the meantime, Casa is on care and maintenance and is not expected to consume any significant cash resources. Casa is a significant 3 million ounce gold asset and we are confident of progressing the sale of this non-core asset," von Schirnding said.
By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com
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Arc Minerals (ARCM)