JOHANNESBURG (miningweekly.com) – ASX-listed Castle Minerals has executed a put option and sales agreement with private Australian company Bunda Resources over Castle’s Julie West project, in north-west Ghana, under which Castle has a 14-day option to offload the project to Bunda for A$500 000 in cash and a 4% net smelter gold royalty.

The Julie West project, which hosted a 56 200 oz deposit, formed part of Castle’s Wa gold project.

The cash component of the purchase price was payable in two tranches, with the first tranche comprising a nonrefundable A$250 000 deposit, which had been paid to Castle to be held in escrow, pending exercise of the put option.

The remaining A$250 000 component was payable to Castle upon Ministerial approval for the transfer of the Julie West prospecting licence to Bunda.

Should Castle not exercise the put option, a fee of A$40 000 would be payable to Bunda and the deposit refunded.

Castle MD Mike Ivey said the deal provided immediate funding for the group, as well as potential future royalty payments in the order of several million dollars, depending on ultimate gold production.

“We are now in a position to continue with exploration and evaluation of our gold and graphite targets in Ghana,” he commented.

The sole condition precedent to the transaction was that Ghanaian Ministerial consent be granted for the transfer of the Julie West prospecting licence to Bunda.

The parties had agreed a “drop dead date” of two years in which to secure the approval. In the event that Ministerial approval was not obtained by that date, the agreement would come to an end, Castle would retain all rights and Bunda would be released from the obligation to pay the second tranche of the purchase price.

Castle would not be required to refund any part of the first nonrefundable tranche deposit.

“The agreement with Bunda has been structured as a put option to ensure that if Castle receives a higher competing offer for the project in the next 14 days, it will be able to accept that offer,” added the miner.