Sarama Resources (ASX:SRR) has entered into a binding agreement to acquire a majority interest in the Cosmo Newberry Gold Project in Western Australia.
The Cosmo Newberry Project, which is owned by Cosmo Gold and Adelong Gold (ASX:ADG), covers 580km2 and lies 85km northeast of Laverton.
Sarama Resources, which has a market capitalisation of $5 million, will acquire 80% of the project’s interest via issuing 25 million shares and 7.5 million unlisted options to Adelong Gold.
Adelong Gold Managing Director Ian Holland says all of the parties involved have completed many of the conditions precedent to which the transaction is subject.
“The company has agreed to accept shares and options in Sarama in full payment of the loan, which will provide an initial ongoing interest in the high-quality gold project and, in time, assist in funding the development of our gold and rare earth projects in Australia and Brazil,” Holland says.
Subject to receiving shareholder approval, Sarama will also pay $50,000 to Cosmo Gold within 21 days of executing the share purchase agreement and $50,000 to Cosmo.
Once completed, Sarama and Cosmo will form an unincorporated joint venture, in which Sarama will hold 80% interest in the project and Cosmo will hold the remaining 20%.
Sarama has the ability to increase its ownership to 100% in the majority of the project, via an option to acquire the vendors remaining interest within a two-year period post completion.
CEO Andrew Dinning says the company is looking forward to completing this transaction in due course.
“The company considers the project to be highly prospective for a number of commodities and its scale, location, favourable geological setting and truly underexplored status presents a unique exploration opportunity,” Dinning says.
Samara says the project is available for systematic and modern-day exploration programs to be undertaken on a broad scale.
It is anticipated that future exploration programs will follow up preliminary targets that were generated from regional soil sampling and limited reconnaissance drilling programs.
Sarama Resources is a West African gold explorer and developer focused on establishing a new mining district in Burkina Faso.
Write to Aaliyah Rogan at Mining.com.au
Images: Sarama Resources
