FALG.zw| RIOZ.zw | Announcement to Shareholders

Published: 04 July 2017

The Directors of RioZim Limited ("RioZim") and Falcon Gold Zimbabwe Limited ("Falgold") are pleased to announce to their Shareholders and other stakeholders that, following negotiations between the two companies, an agreement has been reached for RioGold (Private) Limited ("RioGold"), a wholly owned subsidiary of RioZim, to acquire 100% of Falgold's wholly owned subsidiary, Palatial Gold Investments (Private) Limited ("Palatial Gold").

Palatial Gold owns the Dalny Mine Complex ("DMC") which consists of a gold processing plant, equipment, mining claims, mining infrastructure and a mine compound.

DMC has been under care and maintenance since August 2013. From March 2015, RioGold has been processing ore mined at its Cam & Motor Mine at the Dalny Mine Gold Processing Plant under a lease agreement. The Directors of RioZim believe that DMC has attractive exploration ground with potential for delineating resources for mining. The acquisition of Palatial Gold is in line with RioZim's strategic initiative to consolidate gold assets and output under RioGold through mergers/acquisitions in order to expand its gold operations.

On the other hand, the disposal of Palatial Gold by Falgold will allow Falgold to rationalise its asset base and focus on the mining efforts of the group.

Both parties are in the process of fulfilling the conditions precedent to the transaction. Shareholders and the public are therefore advised that the acquisition is subject to statutory, regulatory and shareholder approvals and as such they should continue to exercise caution and to consult their professional advisers when dealing in the shares of RioZim and Falgold.

Further details regarding this transaction will be made available in the circulars of both companies to be published in due course.
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