Photo by: Bloomberg
PERTH (miningweekly.com) – Australian gold producer Resolute Mining has taken a 27% interest in Canadian explorer Loncor Resources through a C$2.6-million subscription placement and a C$2.5-million share swap.
The agreement will see Loncor acquire full ownership of two companies in the Democratic Republic of Congo (DRC) holding exploration permits in the Ngayu gold belt, increasing the Canadian firm’s holdings from 1 130 'carres' to 1 997 'carres'.
Loncor will then issue Resolute 26-million common shares, priced at C$0.10 each, with Resolute also purchasing a further 25-million Loncor shares held by Loncor founder and CEO Arnold Kondrat in exchange for C$2.5-million, which will be paid through the issue of Resolute shares.
The actual number of Resolute shares to be issued to Kondrat will be calculated based on the five-day volume-weighted average price of Resolute shares immediately prior to the date of completion.
On completion of the transaction, Resolute will have the right to appoint one director to the Loncor board.
The agreement has also committed both companies to collaborate on the identification and development of orebodies in the DRC in order to maximise shareholder value.
Resolute MD and CEO Jon Welborn said on Wednesday that the investment in Loncor was opportunistic and part of Resolute’s broader strategy in the region.
“We are convinced these Archean greenstone belts will host future gold mines. Resolute is establishing a strategic position by acquiring interests in successful explorers with large holdings. The investment in Loncor complements our existing interest in Kilo, which has already delineated a 1.7-million-ounce orebody in the region.”
Welborn added that, ultimately, the company’s ambition was to participate in the development of a major new gold mining district, consistent with Resolute’s Golden Pride legacy as a successful pioneer of the gold mining industry in East Africa.