ASX-listed Mako Gold has entered into a binding memorandum of understand (MoU) with TSX-listed Geodrill, which will undertake drilling services at Mako's gold projects, in Côte d’Ivoire.
Under the terms of the MoU, Mako has agreed to commit up to $2-million worth of reverse circulation (RC) drilling, diamond drilling (DD) or air core (AC) drilling with Geodrill. The agreement is valid for 12 months and will comprise two stages of six months each. Each stage will involve $1-million worth of drilling services.
Mako may, at its discretion, choose to pay Geodrill in cash for its services; however, the gold exploration company says the drill-for-equity agreement will enable it to drill at half of its normal drilling contractor costs.
It is considering implementing drill-for-equity facilities on all its upcoming drilling programmes.
“We are pleased to have secured a drill-for-equity agreement with such a high-calibre drilling company. We have a long-standing relationship with Geodrill and have always been impressed with the quality of their work, including their extraordinary environmental, social and governance initiatives in the communities where they operate.
"This agreement provides more options for payment of drilling invoices and will assist in the rapid recommencement of drilling on our flagship Napié project. We look forward to strengthening our ongoing relationship with Geodrill, which should be beneficial to all Mako stakeholders,” comments Mako MD Peter Ledwidge.
Geodrill CEO Dave Harper says the company is proud to partner with Mako on its Napié and Korhogo projects.
"We have had a long and successful relationship, having previously drilled on multiple discoveries with the management team in West Africa. One of the discoveries went on to become a major producing mine.
"The ‘drill-for-equity’ arrangement allows Mako to drill twice the meterage for the same cash burn, doubling the likelihood of success, while at the same time providing flexibility to revert to cash payment, should Mako elect to. We look forward to increasing our shareholding in Mako,” he adds.