“The goodwill and pragmatism demonstrated by Azumah Resources and Ibaera to complete the EISA in a very compressed time-frame is indicative of their collaborative approach towards fast-tracking exploration and ultimately the development of the Wa gold project,” says Azumah Resources MD, Stephen Stone.
“Azumah Resources has grown the project to its present 2.1 Moz status and now looks forward to combining with Ibaera’s team of exploration and project development professionals to unlock its full value,” continues Stone.
The terms of the EISA are as contemplated by the binding Term Sheet setting out the basis for the parties to boost mineral resources, ore reserves and to deliver a study supporting a decision to proceed to production within the next two years.
The EISA, which will require the approval of the Government of Ghana, provides for the following:
- Ibaera will earn an interest in the Project, including the company’s Ghana mining licences, through the provision of funds to Azumah’s wholly owned Ghana registered subsidiary, Azumah Resources Ghana Limited (AZG)
- Ibaera will spend an initial US$11.25 million (~A$14.3M) within two years to earn an initial 42.5% interest
- If additional funds are required to achieve the key objectives of the joint venture, and Azumah Resources elects not to pro-rata co-fund and maintain its 57.5% equity, Ibaera may sole fund to a total of US$13.50M (~A$17M) and increase its interest up to 47.5%
- If Ibaera does not fulfil its initial funding obligations of US$11.25M, subject to provisions to rectify this, it will withdraw from and not hold any equity in AZG
- The parties will work together to co-fund all subsequent expenditures and/or to secure project development funding with each party having the right to match third party funding terms
- A standard industry fair market-value based dilution mechanism will apply if one party elects not to contribute
- The AZG board will be reconfigured from the existing two directors to four with Azumah Resources appointing the chair who will have a casting vote so long as Azumah Resources remains the majority equity holder
- Ibaera will nominate a suitably qualified and experienced project manager who will submit programmes and budgets to the AZG board for its unanimous approval
- First-Right of refusal, ‘tag-along’, ‘drag-along’ and other sale and exit provisions
- The project licences include the Julie West licence once it has been fully transferred to Azumah Resources by Castle Minerals
- Additional terms as standard in such transactions.
An option whereby Ibaera may subscribe for A$2 million new Azumah Resources shares at a 10% premium to the current market price has lapsed.
Feature image credit: Azumah Resources