Deccan Gold Mines has entered into a definitive earn-in/option and shareholders' agreement to acquire an initial 51% stake in Spain-based Logrosan Minera S.L. (LMSL) through an earn-in investment of EUR 1.76 million. According to latest reports, the acquisition is expected to be completed progressively by March 2027. Following completion of the earn-in, the company will have the option to increase its stake to 75% through an additional EUR 1.0 million investment, subject to milestone achievement and independent valuation. The transaction is being funded through internal accruals or existing cash reserves, representing a manageable ₹15.84 crore commitment. Since the target company is based in Spain and is not an Indian listed entity, SEBI's SAST (Substantial Acquisition of Shares and Takeovers) Regulations regarding open offers do not apply to this transaction.
Deccan Gold Mines shares gained nearly 4% in early trade on Tuesday following the announcement of its controlling stake acquisition in Spain-based Logrosan Minera S.L. (LMSL). According to latest market reports, the stock was trading at ₹173, up 3.75% in morning trade, with the stock nearing its 52-week high of ₹181.50. The company currently commands a market capitalisation of approximately ₹3,416 crore, reflecting strong investor confidence in the strategic expansion into critical minerals. Investors appear to be betting that the transaction could transform Deccan Gold from a domestic gold-focused explorer into a broader critical minerals player, aligning the company with the growing global demand for strategic resources used in energy transition and defence applications.
LMSL holds the 37 square kilometres Logrosan project and the 40 square kilometres Maria project in Spain. As reported by Business Standard, the investment proceeds will be utilized for exploration and development of these mineral assets. Previous exploration work at Logrosan has identified targets for tungsten, gold, tin, rare earth elements, niobium and tantalum. Earlier drilling programs intersected multiple zones of scheelite-bearing tungsten mineralization, while an ongoing drilling campaign is aimed at expanding and defining the identified mineralized zones. Encouraging drilling results have returned tungsten intersections including 3 metres at 0.42% WO₃ and 9 metres at 0.32% WO₃, indicating the potential for economically viable mineralisation. Tungsten is considered a strategic mineral due to its applications in defence, aerospace, electronics and advanced manufacturing. According to CNBC TV18, exploration carried out by Deccan Gold's partners has identified multiple targets through soil sampling, geophysical surveys and drilling programmes, with a current drilling programme underway to further define and extend the mineralised zones.
Under the shareholders' agreement, subsequent project funding will be undertaken on a pro-rata basis, with Deccan Gold's stake potentially increasing up to 95% through dilution of non-contributing shareholders, while the existing shareholder retains a minimum non-dilutable 5% interest. According to Business Standard, the transaction remains subject to regulatory approvals in India, Spain and the UK. The structure further allows the company to potentially raise its ownership to as much as 95% over time, while the existing shareholder retains a minimum 5% interest. This strategic entry into the European mining sector via Spain provides operational control over Spanish projects and portfolio diversification into tin and tungsten alongside existing gold interests.
Dr. Hanuma Prasad Modali, managing director of Deccan Gold Mines, stated that the definitive agreement for Logrosan marks another important step in the company's strategy to build a globally diversified portfolio of gold and critical mineral assets. As reported by CNBC TV18, securing a pathway to operational control of a prospective tungsten project in Spain strengthens exposure to a broader mineralised district with potential across gold, rare earth elements, tin, and other strategic minerals. The project offers exposure to tungsten, gold, tin, rare earth elements, niobium and tantalum, with early exploration results indicating potential for tungsten mineralisation, with additional upside from gold and rare earth elements. Modali added that Logrosan strengthens their international critical minerals portfolio and aligns closely with their long-term vision of building a globally relevant mining platform. The acquisition provides Deccan Gold with operational control over a promising tungsten project and enhances its exposure to critical minerals that are increasingly important for global supply chains and industrial competitiveness.
Deccan Gold shares closed at ₹159.25 on the BSE, down 7.70 points or 4.61% for the day following the announcement. According to CNBC TV18, the stock was trading at ₹173, up 3.75% in morning trade before the market correction. The company currently commands a market capitalisation of approximately ₹3,416 crore, reflecting strong investor confidence in the strategic expansion into critical minerals despite the recent market volatility. Tungsten is classified as a critical mineral due to its use in defence, aerospace, semiconductors, electronics and advanced manufacturing industries, positioning the company well for future opportunities in the critical minerals space.
