Shareholders of Dublin-based exploration group Ovoca Gold have unanimously approved the acquisition of a 74 per cent stake in Russian company Ayax Prospectors Artel in a deal worth about €13.6 million.

At an extraordinary general meeting in Dublin yesterday, Ovoca chairman Roger Turner welcomed the approval, saying that it put the company in an excellent position for the future.

"This is a project that has proven deposits and, by buying into it, we are short-circuiting the route to market and avoiding the very cost-intensive and risky exploration stage," he said.

The acquisition was funded through the issue of 110 million Ovoca shares and a one-off cash payment of $1 million (€782,000).

Ayax owns the Goltsovoye silver deposit in eastern Russia. According to Ovoca, the site is estimated to hold about 74.3 million ounces of silver deposit, which is currently trading at just under $12 an ounce. This values the site at about $890 million.

Mr Turner said the acquisition would grow Ovoca's current market capitalisation by as much as 10 times. The company has no other projects that are even near the production stage, he said.

Ovoca is seeking to tap into rising precious metal prices. In its latest results statement for the six months to the end of August, it recorded a loss of €6 million. It also announced details of a £5 million (€7.2 million) share placing to develop the Russian project and to progress the group's other exploration activities in Russia and Scandinavia. Just over £2 million of the new placing was taken up by two of the Russian directors who, along with one other, were elected to Ovoca's board yesterday.

Mr Turner said it was likely that Ovoca, which is listed on the London and Dublin stock exchanges, would consider disposing of some of its assets.