AIM-listed Goldplat has signed a Letter of Intent (LOI) with Gulf Shore Resources (GSR) to give GSR the option for a US$3 million earn-in to Goldplat’s Anumso project.
Goldplat owns a 90% interest in the Anumso gold asset, which has a 10 year renewable mining lease for gold and associated minerals and resource of 166 865 oz of gold grading at 2.04 g/t.
The LOI is intended to progress to a legally binding option agreement within 30 days following a normal due diligence period and is subject to receipt of approval by the boards of directors of both companies, the TSX-V, and regulatory approvals in Ghana related to the license.
However, under the terms of the LOI, GSR (a TSX-V listed company) will have the sole right after 14 days to elect to have the terms of the LOI binding on the parties, in which the LOI shall become a binding agreement between GSR and Goldplat.
GSR will have the option to earn 75% of Goldplat’s interest in Anumso (67.5% of the overall project interest) by expending an aggregate of $3 million on exploration on the Anumso gold project over two-and-a-half years.
The LOI provides for two option periods: in the first option period GSR will be given the opportunity to earn a 51% interest in the project by expending $1.5 million on exploration on the project over 18 months; and in the second option period an additional 24% will be earned by expending a further $1.5 million over the following 12 months.
GSR will be the operator of the exploration and development programme during the option periods and the licenses will remain in Goldplat’s name.
However, if GSR does not exercise the second option, a joint venture will be formed and both parties will contribute pro-rata to further development with either non-contributing party being diluted.
Although, if either party is diluted to 10%, the interest will be converted into a 1.5% net smelter return which can be bought out by the other party for $100 000 per 0.1%, for an aggregate of $1.5 million.
Gerard Kisbey-Green, CEO of Goldplat says that he is delighted to announce the signing of this LOI with GSR and that the Anumso gold project is highly prospective and offers significant development opportunity to which Goldplat wishes to maintain exposure.
The current resource size and economics makes raising capital to develop a mine on the project difficult in the short term, but the proposed earn-in arrangement with GSR allows for Anumso to be developed with the appropriate initial focus on increasing the size and quality of the resource.