Photo by: Bloomberg
JOHANNESBURG (miningweekly.com) – ASX-listed Pegasus Metals on Wednesday announced that it would buy Scorpion Minerals, which holds the rights to acquire up to a 70% joint venture (JV) interest in the Dablo palladium/platinum/gold/nickel/copper exploration project, located in Burkina Faso for A$360 000.
This will be paid through the issue of a total of 12-million fully-paid ordinary shares in the capital of Pegasus at an implied price of 3c apiece.
Scorpion is party to a memorandum of agreement which sets out the key commercial terms of a proposed JV with Newgenco Exploration West Africa (Newa).
Pursuant to the memorandum of agreement and the agreed proposed commercial terms of the JV with Newa, Scorpion can acquire its interest in the project covering 981 km2 in two phases, including spending $4-million on agreed expenditure within 24 months after the date the conditions precedent to the JV agreement are satisfied to earn an initial interest of 51% in Dablo.
Scorpion must further spend a minimum of $1.15-million within 12 months after the starting date.
The second phase will see Scorpion earn up to a further 19% interest by spending up to a further $4-million on agreed expenditure within the period of 18 months after completion of the first phase.
On completion, the parties must jointly contribute to expenditure at Dablo in proportion to their ownership interests or dilute on terms that are usual in agreements of this type. In line with the acquisition of Scorpion, Pegasus will assume all commitments of the Scorpion/Newa agreement.
“This followed the review of a number of opportunities to supplement its Mt Mulcahy copper project. The proposed transaction is an excellent opportunity and has been secured on attractive terms,” Pegasus stated, adding that acquisition provided it with a first mover advantage in an emerging base metals, gold and platinum province.
Historically, the Dablo project was the subject of a JV between Newa and First Quantum with more than $6-million having been spent on exploration activities.
This included a ground transient electromagnetics survey, an airborne versatile time domain electromagnetic survey, soil geochemistry, geological mapping, and local prospect scale work.
The exploration work also included five diamond holes for 915 m in 2014 with the best result returning 39 m at 0.87% nickel, 0.27% copper, 3.77 g/t platinum and palladium and 0.74 g/t gold.
To fund the acquisition, Pegasus will place 20-million ordinary shares at 3c apiece, to raise $600 000 before costs associated with the issue.
The funds raised will also be used for exploration activities at the company’s Mt Mulcahy project, in Western Australia, working capital and repaying $250 000 of the loan facility provided by Investmet to Scorpion.