Predictive Discovery has announced the signing of a MoU with Progress Minerals and West African Ventures Investment on the Bobosso project in Cote D’Ivoire.
Under this agreement, Predictive Discovery will not be required to fund a 30% share of future JV exploration costs and will be entitled to one or more payments in cash and/or shares.
Subject to compliance with several conditions precedent, the agreement terms are as follows:
- Progress will pay PDI C$0.5 million in cash on achievement of several conditions precedent (below) and take ownership of PDI’s current 30% equity,
- Mine development payments: On the first development of a commercial mining operation on each of the three permit areas, Progress will pay US$10/ore reserve ounce of gold as defined in a bankable feasibility study for the relevant permit to Predictive Discovery and WAVI. Payments will be made in proportion to the ratio between Predictive Discovery and WAVI’s equities in the JV (respectively 43%:57%).
- The first mine development will generate a minimum payment to Predictive Discovery and WAVI of US$5 million.
- Up to three payments may be made
The key conditions precedent are:
- Completion of a C$7 million capital raising by Progress by 31 August 2018
- Completion of legal due diligence assessment by Progress
- Finalisation of definitive agreements by 29 June 2018
- Receipt of Mines Minister’s approval to change project ownership
- The C$0.5 million cash payment will be used to support Predictive’s activities in Cote D’Ivoire, Burkina Faso and Mali
“This development is a natural outcome of Predictive’s prospect generator strategy,” comments, Predictive Discovery MD Paul Roberts.
“The company’s aim is to maximise exploration activity on multiple projects while minimising expenditure and therefore dilutive capital raisings.
“This requires a highly disciplined focus on value for money and conversion to “free carry” deal structures where we judge that JV contributions do not provide sufficient value.
“At Bobosso, following completion of two drill programmes in the past year, we have concluded that this complex gold mineralised system is likely to require a very large investment in exploration and evaluation to have a chance of being developed.
“Therefore, in the interests of our shareholders, we have decided to convert our equity to an effective free carry position now and focus Predictive Discovery’s expenditure on other areas, including three promising gold discoveries elsewhere.
“If one or more mine developments are eventually achieved at Bobosso, the company would consider returning the majority of payments made under this agreement to Predictive Discovery shareholders,” he continues.