Asante Gold has successfully reached agreement through its special board committee to close the acquisition of the Kubi mining leases on terms as substantially contained in the Kubi definitive option agreement earlier this year.
[quote]Asante Gold will acquire the Kubi Mining leases by issuing seven million treasury shares and reserving for future delivery to Goknet a total of 8 000 oz of gold, thereafter reserving for Goknet a 2% Net Smelter Return royalty (Kubi NSR).
Douglas MacQuarrie, President and CEO says that acquiring Kubi at a cost of $18 million or US$40 per ounce of NI43-101 gold resources is a major step forward for Asante.
“Kubi has near term development potential, an excellent location and considerable grade and resource ounce upside. Share dilution has been minimised by using gold forward and NSR royalty payments,” says MacQuarrie
Royal Gold of Denver holds a 3% net proceeds of production royalty with the Ghana government holding a statutory 10% free carry equity and 5% NSR royalty interest.
Asante plans to further explore and if warranted develop Kubi as a custom milling and direct shipping underground operation. It is located on major deep seated auriferous structures associated with AngloGold Ashanti’s 66 Moz Obuasi gold mine and Perseus Mining’s 6.6 Moz Edikan gold mine.
In addition, Asante Gold will acquire Goknet’s interests in eight prospecting licenses, two totaling 38 km² adjoining to the west of the Kubi Mining leases and six contiguous licenses totaling 270 km² located on the Asankrangwa gold belt 15 km to the south west and along strike of the Asanko gold mine.
Each of these licenses has had considerable exploration work completed and many have drill ready targets outlined.
These licenses are in the process of being transferred to Goknet from a third party, subject to the consent of the Minister of Lands, Forestry and Mines.
To purchase the licenses, Asante will issue up to a maximum of three million treasury shares, although the shares will be issued pro-rata on a license by license basis if as and when valid title is registered in the name of the company.
Goknet will retain a 2% NSR royalty on each license acquired by the company.
“Our immediate focus is to complete a financing to commence the driving of a decline at Kubi for the resource to reserve upgrade drilling and to fund aggressive exploration on our other holdings,” MacQuarrie concludes.