Amigo Resources (LSE:AMGO) has executed a share purchase agreement (SPA) to acquire privately held Zirco Resources and Cyndara 14 for US$33 million ($47 million), which owns the Kamiesberg Project in South Africa.
Kamiesberg contains a resource of 2.71 billion tonnes, including 480 million tonnes of measured resources.
Under the SPA, Amigo intends to fund the purchase price and development costs through a combination of internal funds and debt and/or equity raised directly by its subsidiary, Rare Earths Development.
The proposed acquisition, which is expected to be completed by the end of January 2027, will constitute a reverse takeover for the purposes of the UK Listing Rules of the Financial Conduct Authority.
Upon completion, and subject to ownership adjustments, Amigo plans to own 51% of its subsidiary, which will own the Kamiesberg Project. The company will also be appointed the manager and operator of the project.
Executive Chair Craig Ransley says acquiring the project, with its extensive resources, marks a dynamic new chapter in the company’s growth as an Africa-focused miner.
“This strategy establishes a clear, scalable road map to reach an aggregate processing capacity of up to 16 million tonnes per year (Mtpa) across five standardised 3.3Mtpa units, while substantially de-risking early execution,” Ransley says.
“Crucially, our initial module requires an estimated capital expenditure of approximately US$15 million and is targeted for commissioning within just six months of completion.
“By achieving near-term production, operating cash flows generated from this first phase can be progressively reinvested into subsequent modular expansions, funding our growth organically while protecting shareholders from excessive debt or asset-level dilution.”
Once developed and in commercial production, Kamiesberg is expected to provide an operational step change for Amigo while also diversifying its commodity base. It is also expected to enhance balance sheet resilience by strengthening Amigo’s financial position.
Amigo is a mining finance platform focused on gold production and resource development primarily in Tanzania.
Write to Aaliyah Rogan at Mining.com.au
Main image: Amigo Resources
