/ 6 June 1997

Canadian firm buys large Gencor stake

FRIDAY, 10.30AM

MINING house Gencor is to sell certain of its local and Ghanaian mining interests to Canadian company Eldorado Gold Corporation in a R193,6-million deal, the companies said on Friday.

The assets include two mines, Fairview in Mpumalanga and Bogosu in Ghana, as well as nine exploration projects.

“Eldorado’s participation in a South African greenstone gold operation will be the first major Canadian investment in the South African mining industry,” Gencor CEO Gary Maude said on Wednesday.

The deal involves $140,3-million “on closing”, and up to $53,3-million in deferred compensation, which will be settled by way of $76,3-million in cash and $109,9 in convertible, non-voting Eldorado shares. Gencor will also receive an additional $7,4-million as a 1,5% smelter royalty, with the SA grouyp enjoying a 40% voting interest in Eldorado.

The deal is still subject to approval by the Reserve Bank, the Ghanaian government and regulatory authorities.