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Bulgaria-focused Velocity Minerals (TSXV: VLC) has agreed to cash in on its main asset, the Rozino gold project, along with various other mining assets for total cash consideration of $59 million.
Türkerler, a diversified company based in Ankara, will purchase certain Bulgarian subsidiaries of Velocity. The $59 million will be paid in two instalments: $15 million at closing and the remaining $44 million within 18 months post closing.
A significant portion of the purchase price ($55 million) will be attributed to the Rozino project, part of Velocity’s 70% owned Tintyava property situated in Bulgaria’s Ivaylovgrad municipality. The project is permitted and has been advanced to the pre-feasibility stage. The deposit features a probable mineral reserve of 11.8 million tonnes at 1.22 grams per tonne gold.
Earlier this year, Velocity and its joint venture partner Gorubso-Kardzhali agreed to place the project up for sale on a 100% basis. With the sale, Gorubso-Kardzhali will be entitled to 30% of the attributed price.
Velocity CEO Keith Henderson said Türkerler, whose investments focus on renewable energy projects, is “very well positioned to take assets like the Rozino project to the next stages of development.”
A December 2021 pre-feasibility study outlined a low-cost gold mine with all-in sustaining cost of $755/oz. Over a seven-year mine life, it is expected to produce 465,000 oz. of gold. The report also estimated an after-tax net present value (at 5% discount) of $123 million and an internal rate of return of 27.4%.
“This investment in the Rozino project will be particularly welcome news for the residents of the Ivaylovgrad region as resource-sector investments tend to bring far-reaching economic benefits for local residents and local businesses,” Henderson said.
He also noted that the neighbouring Ada Tepe mine, developed by Dundee Precious Metals, is expected to close in 2026, so the development of the Rozino project mine “will be necessary to secure employment in this part of Bulgaria.”
“Moving forward, Velocity is looking at potential acquisition opportunities throughout Europe to identify projects where we can again add significant value to underappreciated assets,” Henderson said. The company currently holds 70% interests in several other projects in Bulgaria including Obichnik, which also has a resource estimate.
Shares of Velocity Minerals shot up to a 52-week high of C$0.25 following the announcement on Tuesday. By 11:20 a.m. ET, the stock had retreated to C$0.20 apiece, but still 29% higher on the day. The miner has a market capitalization of C$38 million ($28.1m).
