What’s Behind Volt Resources’ 10% Share Price Increase Today?
Volt Resources Ltd [ASX:VRC] shares are up today by 10.53%. At time of writing, shares are trading at 2.1 cents, up from yesterday’s close of 1.9 cents.
Volt Resources is an ASX-listed exploration and development company. Until recently their focus had been graphite and the Bunyu Graphite Project in Tanzania, of which the company owns 100%.
But earlier this year though, the company also got into gold exploration. In mid-May this year they bought Gold Republic, a gold company based in Guinea, Africa. You can read more on this here.
What happened today?
Two Zambian companies currently hold the licences for the Luiri Hill Gold Project. Cupriferous Resources Ltd holds a Large Exploration Licence which covers about 31 squared metres. And then, Cupriferous along with Bukomo Mining Ltd also hold a Mineral Processing Licence.
Under the terms of the binding term sheet Volt gets 85% interest in the project but will also partner with Cupriferous and Bukomo to fund and develop the gold project.
The Zambian government confirmed today both licences are in good standing.
The check of the licences is part of Volt’s due diligence to finalise the deal. Volt has taken several steps in this direction, like obtaining historical data on the mine including previous drilling and studies, and is also planning on starting drilling sampling and analysis.
Volt estimates the JORC 2012 mineral resources estimate to be 10.2 million tonnes at 2.6 g/t gold for 851,000 ounces of gold at Matala and Dunrobin.
Volt Managing Director Trevor Matthews said:
‘Obtaining confirmation of the good standing of the Luiri Hill Gold Project licences is a key step forward for the acquisition. The Company has taken the opportunity during the due diligence process to further develop our understanding of the Project and progress with key programs of work to identify the best pathway to early production.’
What will happen next?
For the deal to go through, Volt also needs the approval of the shareholders. The meeting is scheduled for next Monday, 20 July.
One way to get exposure to gold is to invest in gold companies, like Volt. But this can be risky. Another is to buy physical gold.
For a step-by-step guide on how to buy physical gold, you can check out Shae Russell’s ‘Best Way to Buy, Sell, and Store Gold’.
To read this FREE report, click here.
For The Daily Reckoning Australia