ASX-listed Resolute Mining has entered a binding agreement to secure a 27% interest in TSX-listed Loncor Resources.
The agreement outlines a series of transactions which expands Loncor’s existing asset base and will result in Resolute Mining owning 51,000,000 common shares of Loncor through a CA$2.6 million subscription in a placement of new Loncor shares and a ‘share swap’ of CA$2.5 million of Resolute Mining shares for 25,000,000 existing Loncor shares.
Loncor is a Canadian gold exploration and development company listed on the Toronto Stock Exchange under the symbol code LN.
Loncor holds gold prospects and resources in north-eastern Democratic Republic of Congo (DRC) which include exclusive gold rights to an area covering 2,087 km2 located along the Ngayu Archaean greenstone belt in the Orientale province.
The Ngayu Archaean greenstone belt is the north-western extension of the Lake Victoria
greenstone belt terrain which hosts a number of world class gold deposits, including Geita, North Mara, and Bulyanhulu.
This belt also contains the Golden Pride mine which was developed, owned, and operated by Resolute Mining and produced more than 2 Moz of gold between 1998 and 2014.
The north-eastern DRC is recognised as one of the most prospective and under-explored exploration frontiers in the world.
The region remains relatively under explored despite hosting the 20+ Moz Kibali Gold Project operated by Randgold Resources and AngloGold Ashanti.
Kibali is currently producing ~700,000 ounces (oz) of gold per annum at total cash costs of ~US600/oz.
During 2016 Resolute Mining acquired a 27% interest in TSX-listed Kilo Goldmines.
Kilo has a large landholding in north-eastern DRC which, similar to Loncor, is split between 100% owned prospects and projects under joint venture with Randgold.
Resolute Mining MD and CEO, John Welborn, indicated the investment in Loncor was opportunistic and part of a broader Resolute strategy in the region:
“We are convinced these Archean greenstone belts will host future gold mines.
“Resolute Mining 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 Moz ore-body in the region.
“We are pleased to establish a new partnership with both Loncor and with Arnie Kondrat with the aim of collaborating to unlock value.
“Ultimately our ambition is 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,” he concludes.