Posted at 9:38 a.m., Tuesday, July 17, 2007
River Diamonds buys part of Fiji gold mine for $5.1M
Bloomberg News Service
River Diamonds Plc, a U.K.-based mining-exploration company, purchased part of a gold deposit in Fiji for 2.5 million pounds ($5.1 million).The 12.5 percent stake was bought from a unit of Vancouver- based bank Red Lion Management Ltd., which took control of the Emperor mine after it stopped production because of escalating costs, said Kirin Morzaria, River Diamonds' finance director in London. The mine will need at least 5 million pounds from shareholders to resume production within six months, he said.
"We're willing to invest further to bring this mine into production in as short a time as possible," Kirin said in a phone interview today. "We see cost savings to be had that will enable the mine to operate profitably."
Shares of River Diamonds climbed 0.15 pence, or 9.2 percent, to 1.77 pence as of 1:42 p.m. in London. The stock has increased 78 percent in the past year.
The Emperor gold mine started in 1936, producing about 7 million ounces of the precious metal over 70 years. New production is estimated at 100,000 ounces a year out of total resources of about 5 million ounces. The mine will be the first producing asset of River Diamonds, adding to its diamond- exploration holdings in Sierra Leone and Lesotho and gold- prospecting sites in Brazil, Kirin said.
