Resolute Mining notes that the acquisition of Osisko’s stake in TSX-listed Canadian gold explorer Kilo Goldmines will increase the company’s interest to 27.4% of Kilo’s shares on issue, following an initial acquisition of 14.6% interest in Kilo through participation in a private placement in August 2016.
Under the terms of the agreement, Resolute Mining will purchase, through a wholly owned subsidiary, Osisko’s 21 868 000 shares of Kilo by issuing 1 457 867 ordinary Resolute shares.
Based on the most recent closing price for Resolute shares of A$1.70, the price paid for Osisko’s stake is equivalent to C$0.11 per Kilo share.
“We are pleased to have increased our stake in Kilo at this exciting time. Kilo is about to commence drilling at a range of untested targets in close proximity to their Adumbi prospect in the Democratic Republic of Congo (DRC), which forms part of the Somituri project,” says Resolute Mining MD and CEO John Welborn.
Kilo has a large landholding in the Kilo-Moto region and, in addition to the Somituri project, has a joint venture with African gold major Randgold Resources on the Isiro project.
“We see Resolute’s expertise and skill set being a strong match with the ideology and strategy of Kilo’s management and look forward to future exploration results,” says Welborn.
This acquisition is in line with Resolute Mining’s vision to build a portfolio of investments in well run, highly prospective, gold exploration assets in regions considered to hold potential for the development of future Resolute gold mines.
Welborn says that Kilo is a perfect match for the company’s criteria of existing asset quality, future prospectivity, relative value, and an experienced capable management team primarily focused on gold project exploration and development.
Kilo also meets Resolute’s criteria for pre-development assets and has appeal owing to its large landholding in the north east of the DRC; its modest market capitalisation of about C$20 million; and its strong exploration team, which has extensive Central Africa exploration experience.
Resolute remains in discussion with Kilo’s board and management have commenced on possible technical co-operation and how Resolute can best support Kilo’s operations and ambitions.
The company expects that in due course Resolute will nominate a non-executive director to join Kilo.