PERTH (miningweekly.com) – ASX-listed junior Aurora Minerals has become a cornerstone investor in fellow-listed Golden Rim Resources by providing A$3-million in funding.

Under the terms of the loan, Golden Rim could repay the funds in two tranches, with the first tranche repayable by converting A$1.65-million of the loan into more than 206.2-million shares in Golden Rim, resulting in Aurora gaining a 19.96% interest in the junior company and becoming Golden Rim’s largest shareholder.

The balance of the loan would be repayable on Aurora electing to receive payment, also by the issue of shares or by a cash payment. Each of the shares issued in the second tranche would be issued at a price equal to a 20% discount to the 20-day volume-weighted average price of Golden Rim shares.

The second tranche share conversion could be made at any time six months following the draw-down and until around 11 months after the execution of the loan agreement.

Early repayments can only be made if Golden Rim sells, transfers or assigns any of its Burkina Faso assets for A$1.5-million or more, and Aurora then elected to apply for a maximum of 50% of the sale proceeds.

Aurora has been looking for some time at investment opportunities to accelerate its ambitions of becoming a successful exploration and development company. The company told shareholders that the investment into Golden Rim would be a measured risk, at a time when valuations were approaching cyclical lows.

Golden Rim has several gold prospects in Burkina Faso, Mali and the Ivory Coast, covering some 5 000 km².

Following the agreement with Aurora, Golden Rim would restart drilling operations at its West African prospects, specifically the Korongou project, in Burkina Faso, as well the Balogo project, which remains the company’s main focus.

The funding would also allow Golden Rim to meet it’s A$900 000 exploration permit option payments, which were due over the next 12 months.