MedaVinci to acquire Orogen Gold as part of new strategy

Medical technology investor turned mineral explorer, MedaVinci (LON:MVC) has announced plans to acquire unlisted Serbia-focused gold explorer Orogen Gold. The company has agreed to buy 49% of Orogen for £370,000, with an option to acquire the remaining 51% over the next twelve months by issuing 29.2% stake in MedaVinci.

Concurrently, MedaVinci intends to raise £842,000 through a placing.

During the 2009 financial year, ended 31st March, MedaVinci made a £5.2m loss, and it carried out a review of its business and its portfolio of medical technology investments. In July 2009, the company concluded that its investment portfolio had negligible value, and with its recently established new management team it began to restructure the business.

In relation to the Orogen deal, MedaVinci chairman Adam Reynolds said: "This is a significant step forward for MedaVinci and we have made substantial progress since we re-financed the business, changed the board and the business model last year.”

“Over the past 12 months the board has looked at a number of investment opportunities and believes that the investment in Orogen Gold represents an opportunity for the company with the potential to enhance shareholder value,”MedaVinci stated.

Orogen Gold was incorporated in Ireland in April 2010, and its primary interest is in the Deli Jovan gold project, in eastern Serbia. Orogen has the right to earn a 55% stake in Deli Jovan, through an earn-in agreement.

Deli Jovan has a 69 square kilometre permit area and icludes two shallow underground gold mines with historic gold production, which were last in operation before World War II.

Under the terms of the deal, the explorer must spend C$1.5m on exploration at Deli Jovan by 20 June 2012. Orogen can earn a total of 75% in the project, by spending a further C$2m on exploration by December 2013.

It is anticipated that Michael Nolan, a director of Orogen Gold, will join the MedaVinci board as a non-executive director, and MedaVinci’s Adam Reynolds will join the board of Orogen Gold.

According to MedaVinci, Orogen Gold’s founders and directors - John Barry, Edward Slowey, Alan Mooney and Michael Nolan - “all have considerable geological and corporate expertise gained by working on mineral exploration and production projects worldwide and are connected to an international network of senior advisors in exploration, mining, commercial operations and financing”.

The proposals require shareholder approval, and as such MedaVinci is convening a general meeting for 1 September 2010.

http://www.proactiveinvestors.co.uk/companies/news/19826/medavinci-to-acquire-orogen-gold-as-part-of-new-strategy-19826.html