ASX-listed Mako Gold has signed a binding memorandum of understanding with drilling contractor Geodrill for its Napié and Niou projects in Côte d’Ivoire and Burkina Faso, respectively.
Côte d’Ivoire and Burkina Faso - The deal will allow Geodrill to subscribe for up to US$1 million worth of shares in the capital of the company in return for drilling services at Mako’s discretion.
Under the terms of the agreement, Geodrill agrees to provide drilling services in exchange for Mako shares, up to a total value of $1 million or up to 10 000 m of reverse circulation (RC) drilling, or its equivalent in diamond drilling (DD) or air core (AC) drilling, within twelve months, in two stages of up to $500 000 each.
The agreement effectively allows Mako to drill at half of its normal drilling contractor cash costs, thereby allowing the company to preserve cash, while continuing its drill programs.
Mako plans to implement the drill-for equity facility on its upcoming drill programmmes, pending shareholder approval.
“We are extremely pleased to have secured a drill-for-equity agreement with such a high-calibre drilling company,” saysMako MD Peter Ledwidge.
“We have a long-standing relationship with Geodrill and have always been impressed with the quality of their work. It will be a great endorsement for Mako to add Geodrill to our share register, since they have worked in West Africa for so many years and understand junior exploration companies better than most. We look forward to continuing and strengthening our relationship with Geodrill, which should be beneficial to all Mako shareholders”.
“Geodrill is proud to be partnering with Mako Gold on their Napié and Niou projects,” says Geodrill CEO Dave Harper.
“We have had a long and successful relationship, having drilled on previous discoveries together in Burkina Faso (then with Orbis Gold), one of which went on become a major producing mine.
“The ‘drill-for-equity’ arrangement allows Mako to drill twice the meterage for the same cash burn, doubling the likelihood of success, while at the same time providing flexibility to revert to cash payment, should Mako elect to. We look forward to becoming shareholders in Mako.”