10th Oct 2016 08:16
LONDON (Alliance News) - Avocet Mining PLC on Monday said it has signed a conditional joint venture agreement with a subsidiary of Managem SA concerning its Tri-K gold project in Guinea.
Managem, a Moroccan mining group listed on the Casablanca Stock Exchange, would acquire an initial minority interest in the project which could result in the company acquiring a maximum interest of 70%.
Tri-K has an indicated gold resource of 2.0 million ounces and an inferred resource of 1.0 million ounces. The project also holds proven and probable reserves of 480,000 ounces which is being targeted using a heap leach operation and was awarded a mining permit in March 2015.
Managem would invest at least USD14.0 million into the project, made up of a USD4.0 million payment to Avocet and "at least" USD10.0 million that will be used for the work programme that will lead to a bankable feasibility study for the carbon-in-leach operation being completed within 24 months.
That study has to deliver an ore reserve of at least 1.0 million ounces for Managem to acquire that potential 70% stake. If it falls short of that then it will be limited to acquiring a 60% stake.
Avocet retains the option to repurchase from Managem its equity and intragroup loans associated with the project and resume full ownership, should the work programme not be completed.
Avocet, as part of its medium-term goal, is hoping to have the project in production by 2020.
Avocet shares were up 8.9% to 88.06 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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