Velocity Minerals sells Bulgarian assets for US$59M

Bulgaria-focused Velocity Minerals (TSXV: VLC; US-OTC: VLCJF) has agreed to sell its Rozino gold project, along with various other assets, in return for US$59 million in cash.

Türkerler, a diversified company based in Ankara, will pay the US$59 million in two instalments: US$15 million at closing and US$44 million within 18 months of closing.

Most of the payment (US$55 million) is for Rozino, part of Velocity’s 70%-owned Tintyava property in the municipality of Ivaylovgrad. The project is permitted and has been advanced to the pre-feasibility stage. The deposit features a probable 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. Gorubso-Kardzhali will receive 30% of the payment.

Velocity’s CEO Keith Henderson said Türkerler, whose investments focus on renewable energy projects, is well positioned to take Rozino to the next stage of development.

A December 2021 prefeasibility study outlined a low-cost gold mine with all-in sustaining cost of US$755 per 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 US$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 (TSX: DPM), is expected to close in 2026, so Rozino’s development would help support local jobs.

“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 25¢ following the announcement on Tuesday. By 11:20 a.m. ET, the stock had retreated to 20¢ apiece, but still 29% higher on the day. The miner has a market capitalization of $38 million.