GoldStone Resources (AIM:GRL) has entered into a binding memorandum of understanding (MoU) with Sierra Leone-incorporated gold explorer MinCorp.
As part of the MoU, GoldStone will acquire half of MinCorp through a subscription for new shares in the company for £600,000 ($1.12 million), which will be funded from the proceeds of a recently completed equity fundraising.
MinCorp will also pay GoldStone a one-off overriding royalty in respect of 100% of the first 70 troy ounces of refined 0.9999 fine gold derived from total gold production at the project.
The investment will fund the commissioning of mining and processing equipment aimed at establishing an initial production rate targeted at 2kgs of gold per month, subject to operational performance.
A phased approach has been designed to generate early operational cashflow while providing a platform to advance systematic exploration across the broader licence area in Sierra Leone.
GoldStone will assist and advise on operations, equipment and project security. The company aims to work alongside MinCorp to implement a phased technical program, focusing on mining the gravels while conducting exploration aimed at exposing Kimber structure, from which a broader exploration program will be designed.
CEO Emma Priestley says the project offers an attractive combination of near-term production potential and exploration upside along a proven mineralised trend adjacent to the Boamahun deposit.
“The board believes the project has the potential to contribute to GoldStone’s wider strategy of building a self-funding exploration-from-production-business while maintaining disciplined capital deployment, and we look forward to working closely with the MinCorp team to advance the project and unlock its wider exploration potential,” Priestley says.
The project is located adjacent to the Boamahun Gold Mine, a known gold dpeosit estimated to contain 5.8 million ounces, placing the licence wihtin a well-endowed and proven gold belt.
GoldStone Resources is a miner and developer with projects in Ghana that range from grassroots exploration to production.
Write to Aaliyah Rogan at Mining.com.au
Images: GoldStone Resources
