Spitfire to buy limestone project for $6.3m

Subiaco-based Spitfire Resources has entered into an agreement to buy the White Lion limestone project in Zambia in a deal worth $6.3 million.

Under the terms of the deal, Spitfire will pay White Lion Group an upfront $2.1 million in shares for the acquisition, with a second payment of $4.2 million to be made subject to certain milestones being satisfied.

The project, which is located 100 kilometres from the Zambian capital Lusaka, sits on a granted large scale mining licence and covers a total area of 245 square kilometres.

In a statement, Spitfire said it would begin work at White Lion immediately.

“The company has put together preliminary budgets for a mapping, diamond drilling and scoping program that will cost about $1 million and is expected to see work ongoing at the project until the middle of 2016,” Spitfire said.

“The Spitfire board is of the opinion that the purchase of the White Lion asset offers shareholders the chance to participate in a significant exploration and development opportunity in a market segment enjoying growth and capital support.”

The deal is subject to shareholder approval, which the company will seek by way of a general meeting.

“The directors of Spitfire are unanimously recommending the acquisition and will be voting in favour of it,” the company said.

Spitfire shares were 9 per cent lower at 1 cent per share at 11am.