[miningmx.com] — INVESTMENT holdings group Brimstone Investment Corporation has taken a 10% stake in unlisted Galaxy Gold, saying it was “testing the water’ prior to further forays in the resources sector.
In an interim results presentation released on Tuesday, Brimstone said it acquired an initial interest of 6% in Galaxy, followed by another investment to increase its stake to 10%, during the past six months. According to Brimstone’s chief financial officer, Lawrie Brozin, the total stake was worth between R40m and R50m.
Galaxy is developing the Agnes gold mine near Barberton in Mpumalanga which founder Peter Skeat bought at an auction for R18m in December 2008. It was supposed to list in 2010, but this was delayed by the JSE due to uncertainties over tenure of prospecting and mining rights.
In July, Galaxy said the total mineral resource at the mine was 1.57 million ounces (Moz) of gold at an average grade of 3.36 grams per tonne, exceeding an earlier envisaged target of 1.5Moz.
Galaxy Gold CEO, Ian Watson, said Brimstone was issued new shares as part of a R50m fund raising exercise for the capital requirements of developing its asset. “We haven’t yet got all the money we were aiming for; we’re still in talks with other parties.’
Watson said the group was also still waiting on the transfer of the mining right, after which the listing would proceed, hopefully before the end of the year.
Brozin said the investment “was a low risk entry into the junior mining space where there’s more value’.
“We liked the management and thought we’ll test the water,’ said Brozin. “If this works out, we may consider to make more investments in the sector.’ Brimstone’s most significant holdings are in the financial and fishing sectors.
