Conquest picks up gold producer

Buying-in when political risk is at its highest is permitting Conquest Resources (YQR-V) to assemble a large land package in Zimbabwe’s Midlands gold field.

Conquest, which has already acquired five former-producing mines in the district, has now picked up the Golden Kopje mine, previously held by Kinross Gold (K-T).

Conquest is buying the property from privately owned Elverton, which owns the operating company, Thunderbird Mines. Golden Kopje was in production from 1983. It was originally operated by Falconbridge (FL-T) and subsequently, when Falco left the gold business, by its successor, Kinross. Kinross sold the mine to Thunderbird in late 1997 when production costs reached US$421 per oz.

Since that time, Thunderbird has been operating Golden Kopje at a loss, though it has trimmed costs substantially. In 2000, the operation produced just over 9,000 oz. gold, running cash operating costs of US$206 and total cash costs of US$254 per oz. for a loss, after taxes, of US$402,000.

The acquisition includes a 650-sq.-km land package covering the Chinhoyi greenstone belt along a structural break called the Eldorado shear zone, which hosts several old gold producers. Conquest plans to run airborne magnetic surveys and reconnaissance-scale soil geochemistry over the property.

The deal is financed by a convertible debenture of $560,000, taken back by Elverton. It bears interest at 8%, and both principal and interest can be paid off in cash or shares.