Aim-listed River Diamonds plans to raise £4,67-million in a share sale, to fund a transaction to give it sole ownership of the Vatukoula gold mine, in Fiji, the company said on Thursday.

River Diamonds will buy the remaining 80% of Viso Gero International (VGI) that it does not already own, from Viso Gero Global.

VGI owns 94% of Westech Gold, which, in turn, owns the Vatukoula mine. The companies have agreed that VGI will buy the outstanding 6% of Westech before River Diamonds completes its transaction.

River Diamonds will pay £29,56-million for the VGI stake, in shares and a cash payment of A$2,1-million.

The funds raised in the placing would be used to pay the cash component of the acquisition, as well as for recommissioning costs, and other working capital and operational costs at Vatukoula, the company said.

Westech Gold bought the Vatukoula mine from Emperor Mines (then controlled by South Africa's DRDGold) in 2007, and began mining again in November last year.

The mine had been placed on care-and-maintenance in December 2006, following a three-month review, which determined that continuing mining operations were no longer economically viable.

Once the acquisition is completed, which River Diamonds hopes will be as soon as April 1, the company will focus on returning Vatukoula to profitability, and on exploring the area around the mine.

“The directors believe that the operating losses of the last three years can be attributed to a combination of a lower prevailing gold prices compared to the current gold price and high operating and administrative costs,” River Diamonds said on Thursday.

"The acquisition of the Vatukuola Mine provides River Diamonds with the opportunity to bring this historic gold mine back to profitability at a time of high prevailing gold prices. We believe this will bring benefits not only to River Diamonds’ shareholders, but also to the Fijian Government, the employees at the mine and the people of Fiji,” said River Diamonds chairperson Colin Orr-Ewing.

The company also announced that nonexecutive director David Lenigas would take on an executive role on the company's board, and would advise the firm on technical and operational matters relating to Vatukoula.

Lenigas was formerly MD of Emperor Gold Mines, the DRDGold subsidiary which owned Vatukoula before selling the mine to Westech.

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