PERTH (miningweekly.com) – Gold developer Azumah Resources has inked a term sheet with private equity group Ibaera Capital worth A$17-million, over its Wa gold project, in Ghana.
Under the terms of the agreement, Ibaera will invest the funds to acquire a 47.5% interest in the Wa project area.
The Perth-based equity group would spend an initial A$14.3-million on the project within a two-year period, to earn an initial 42.5% interest. If additional funds are required to achieve the joint venture (JV) objectives, Azumah could elect not to participate in the funding, leaving Ibeara to sole fund the next A$2.8-million to earn an additional 5% interest in the project.
“This transaction represents a game changer for the company and another important step in unlocking fundamental value and achieving a market rerating,” said Azumah MD Stephen Stone.
“It’s been a tough environment in which to build new projects and having carefully considered several options, we are very pleased to be partnering with Ibaera.”
The objectives of the JV were to boost gold resources and reserves at the Wa project above the current 2.1-million ounces and 624 000 oz respectively, and to deliver a feasibility study within a two-year timeframe to support the funding and development of the proposed 90 000 oz/y gold operation.
The JV and earn-in agreement is subject to a number of conditions, including due diligence and Ibaera internal approvals.
Meanwhile, Ibeara has also secured a right to subscribe for A$2-million, or 65-million new ordinary shares in Azumah, prior to the end of August this year.