Golden Rim sells Burkina Faso gold project for $10m
PERTH (miningweekly.com) – ASX-listed Golden Rim Resources has signed an agreement to sell its Balogo gold project, in Burkina Faso, to MNG Group of Companies for $10-million.
“The cash price being offered for Balogo represents very good value for the company. It means that upon completion of the sale, the company will have sufficient cash in the bank for ongoing exploration at our exciting Korongou project, in Burkina Faso, and to consider new opportunities for the company,” said Golden Rim MD Craig Mackay on Friday.
Singapore-headquartered MNG would pay Golden Rim $500 000 in cash, which would be held in escrow until the conditions of the sale were satisfied. Upon the satisfaction or waiver of the conditions, which included the transfer of the Balogo exploration permits to MNG, Golden Rim would receive a further $4.5-million in cash.
A further $2-million would be payable on the earlier of the granting of a mining permit, or within 24 months of the conditions precedent being satisfied or waived. In the event that the payment is not made within 24 months, MNG would transfer 49% of its interest in Balogo back to Golden Rim.
Once the project reached commercial production, Golden Rim would receive an additional $3-million in cash. The company would also receive a 1% net smelter royalty on all gold produced at the Balogo project.
The Balogo project currently covers some 360 km2 and has an inferred resource of 850 000 t, grading 6.8 g/t gold for 185 000 oz of gold.
Mackay said that prior to the current commodity price downturn, Golden Rim had envisaged mining the small, high-grade gold deposit at Balogo; however, after the change in economic conditions, funding for the feasibility study at Balogo proved difficult to source.
MNG’s intent for the Balogo project was to start mining the project as soon as possible.
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