Asante Gold (CVE:ASE), a junior Canadian gold royalty company, agreed with Goknet Mining Company Limited of Ghana to modify the October 14 term sheet with respect to finalizing a definitive agreement to form a 50:50 joint venture to develop the Kubi gold project in that West African nation.
The new term sheet extends the closing date to January 31, the Vancouver, British Columbia-based company said in a statement today. The new sheet will allow Asante additional time to complete its due diligence review.
Under the terms of the deal, Asante must issue to Goknet 2 million shares in its capital stock in exchange of the 50 percent stake, and must fund the JV with $2 million within four months of closing. Asante must also provide total funding of $15 million within two years.
Asante retains the option for one year to increase its interest to 75 percent by issuing to Goknet either 10 million shares of its capital stock or the greater of $10 million or the cash value of 8,000 troy ounces of gold.
Asante also retains a second option for a further year to increase to 100 percent by issuing to Goknet an additional 5 million shares in its capital stock and by granting to Goknet a 2 percent net smelter royalty (NSR) with annual advance NSR payments of $50,000.
The Kubi project is located a 15 minute drive north of the town of Dunkwa, a main regional supply center, and 15 kilometres south and along strike from AngloGold Ashanti's 60 million ounce Obuasi gold nine, one of the World's greatest orebodies and a major mining center for more than 110 years.
Asante said it estimates that over $30 million in exploration and development work has occurred at Kubi since the mid 1980s.
Following completion of due diligence by Asante, closing of a definitive agreement and regulatory approval, the JV will focus on debt funding, permitting, engineering, portal construction and driving an exploration decline to circa the -200 metre level for resource definition drilling, bulk sampling and further metallurgical testing.
In particular, Asante said, high grade (+10g/t gold) steeply plunging gold mineralized shoots indicated from the previous drilling will be targeted for early development.
Asante’s share trading remains halted by the company pending completion of due diligence.