The Government of Mali has approved the ministerial decree required by ASX-listed Birimian to extend the mineral exploitation permit held by Société des Mines de Morila SA to the Viper and N’tiola areas of interest within the Massigui gold project.
This following the surrender of these areas of interest by Birimian’s wholly-owned subsidiary company, Birimian Gold Mali SARL (BGM).
The decree has been signed by the Minister for Mines and Prime Minister.
BGM anticipates receiving a US$500 000 exercise option fee for each of the transactions, i.e. a total of $1 million following the satisfaction by Birimian of conditions precedent, which are expected to be completed imminently.
Following receipt of the fee related to the Viper area of interest, BGM will pay Société Hanne General Trading SARL (Hanne) $200 000 in settlement of the amendment agreement entered into by BGM and Hanne earlier this month, in which BGM agreed to acquire the 5% mineral property right held by Hanne in the Viper area of interest.
BGM acquired 95% of the ownership of the N’tiola exploration permit, which included the Viper area of interest, in 2014 in a transaction agreement announced in October 2013. Under the terms of that agreement, Hanne retained a 5% interest in the permit and a 1% net smelter return royalty (NSR) on gold produced from the permit.
Pursuant to the amendment agreement and subject to the conditions precedent, Birimian agreed to pay Hanne an additional sum of $200 000 for its assignment of this 5% mineral property right in Viper. This amount will be payable within seven days of the satisfaction of all conditions precedent.
Hanne will retain the 5% mineral property right in the balance of the N’tiola exploration permit. In addition, Hanne remains entitled to its 1% NSR, which will be paid by BGM out of the NSR BGM receives from Morila, pursuant to the option agreement between BGM and Morila in relation to Viper.
Under the terms of the Viper option agreement, BGM will be entitled to a NSR of either 2%, 3% or 4% per ounce, depending on the prevailing gold price, with the 4% rate applying to a gold price of $1 200/oz or above (being the current gold price).
At this rate, Hanne’s entitlement represents 25% of potential royalty earnings in respect of Viper. This does not apply to royalty earnings from the N’tiola area of interest.
Areas of interest at a glance
The Massigui gold project surrounds the Morila mine lease on three sides and covers strike extensions of the highly prospective geological sequence that hosts the 7 Moz Morila gold deposit.
The area of interest comprises 11km2 and covers the gold deposits at N’tiola and Viper. The balance of the project area (607 km2) is 100%-controlled by Birimian.
The agreement with Morila provides a potential low risk, low cost processing solution, whilst Birimian retains the significant upside potential for further gold discoveries on the broader project area.