Aim-listed copper and gold miner Cradle Arc’s subsidiary Caracal Gold Mali has entered into a joint venture (JV) agreement with Mukuyu Resources for the exploration and development of Cradle’s 137 km2 Kossanto West gold project, in Mali.

The area comprises the Kobokoto and Koussikoto exploration permits.

Mukuyu is a subsidiary of ASX-listed base and precious metals developer Indiana Resources.

The JV is in line with Cradle’s strategy to retain exposure to its African gold exploration portfolio and potential upside, while minimising its exploration and development spend.

Under the terms of the JV agreement, Indiana is to fund costs up to and including the completion of a prefeasibility study (PFS) on the project. Upon completion of the PFS, Indiana will hold a 65% participating interest and Cradle will retain a 35% participating interest in the permits.

All costs after the PFS completion will be split between the parties in accordance with their participating interest.

The permits will continue to be held by Caracal, until the JV committee establishes a new company for the future development of a mine.

Should a new company be established, Caracal will transfer the relevant permits thereto, with the JV partners expected to hold 90% – in the same proportion as their respective participating interests in the JV – and the Malian government expected to hold the remaining 10%.

Initial work planned for Kossanto includes geological mapping, with potential to follow up pitting and trenching activities and reconnaissance drilling, which is anticipated to be undertaken by Indiana over 12 months.

Cradle CEO Kevin van Wouw commented that the agreement allows the company to maintain its primary strategic focus on the development of the Mowana copper mine.

“The terms of the JV do not require Cradle to fund exploration activities up to the PFS stage, such that, accordingly, there will be minimal impact on the company’s balance sheet as we continue to focus on our core asset in Botswana,” he stated.