An investment firm run by Las Vegas investor, former casino operator and race car owner Michael Luzich is a step closer to taking over a small gold mine in Penhalonga, putting down a US$200 000 deposit for the US$1 million operation.
Luzich Partners in October acquired an option to buy 100% of the Penhalonga Gold Project for US$1 million from Prospect Resources, the lithium developer that is developing Arcadia lithium mine at Goromonzi.
Luzich has now paid the US$200 000 initial payment as agreed. The firm will now undertake due diligence on the asset for a period of 180 days and pay further consideration of US$800,000 if it chooses to exercise the option.
Prospect is already in talks to raise money through separate negotiations with Russia’s Uranium One and Afreximbank, and will use the extra money from selling a non-core asset to develop Arcadia.
“The funds received strengthen the company’s balance sheet at a time when sentiment in the lithium market is improving and the opportunity for Prospect to become the next producer in the market is presenting itself,” said Prospect MD Sam Hosack.
Prospect has recently been accepted into the European Commission’s newly-formed European Raw Materials Alliance, which helps the company gain a foothold in the European market ahead of the start of production. The company recently began construction of a pilot plant to produce high-purity petalite and low-iron spodumene.
According to Prospect, Luzich is buying the Penhalonga project on a debt-free and cash-free basis.
“Completion of the transaction is subject to Luzich being satisfied with its due diligence investigations, Prospect obtaining all necessary regulatory consents and approvals and normal commercial terms and warranties associated with a transaction of this nature,” says Prospect.
Luzich: fast lane
This would not be Luzich’s first mining investment; he is the majority shareholder in Toronto-listed Amerigo, which processes tailings at Chile’s largest copper mines.
Luzich founded the Peninsula Gaming Company, which he grew into one of the USA’s biggest casino companies, before selling it for US$1.2 billion in 2012.
Luzich owns a car racing team, Luzich Racing, which won the GTE title in the European Le Mans Series title in 2019.
According to a profile on his website: “Michael Luzich has a love for auto racing that is very much in line with his commitment in his business ventures to always remain ‘ahead of the curve’.”