The agreement also encompasses resource-based milestones. For each permit area, Aurum will issue Encore 1M shares when Aurum defines a JORC-compliant inferred, indicated or measured resource of 250,000 ounces gold.
And the deal sets out further staged issues of 1M Aurum shares for each additional 250,000 ounces of gold defined, up to a maximum of 4M Aurum shares per permit area.
This consideration equates to a maximum 1M ounces gold per permit area and a potential transfer of a total 8M Aurum shares if both permit areas achieve their milestones.
Aurum has designated the two new JV application areas BE/W and BE/E.
The BE/W area fills a strategic gap by enclosing important structures and their gold mineralised trends, which Aurum identified while exploring its contiguous BD and BST grounds.
The BD area hosts seven priority targets, including BDT1 and BDT2, which host significant mineral resources developed by the company’s recent drilling programs as at the end of December.
BDT1 hosts an impressive estimated inferred mineral resource of 11.9 million tonnes (Mt) averaging 0.9 grams per tonne (g/t) gold for a total contained 340,000 ounces gold.
The BDT2 target, about 3.5km north of BDT1, has an estimated 16.3Mt inferred mineral resource averaging 0.8g/t gold for a further contained 440,000 ounces gold.
Both resources are likely to be upgraded in new modelling slated for mid-year.
Notably, the BD ground is peppered with extensive gold anomalism that run better than 100 parts per billion gold in early soil sampling.
The overall anomalism highlights many gold signatures associated with persistent north-south structural trends, including at BDT1 and BDT2.
That north-south anomalism also potentially extends southwards for about 7km along a major north-south fault into the company’s southernmost BST priority target, which hosts an 11Mt inferred mineral resource averaging 1g/t gold for 360,000 ounces of contained gold.
A 5.5km southwards extension from BST arrives at a zone of high-level gold anomalism at Aurum’s Nyangboue South target, at the southern limits of the company’s tenure.
BD’s anomaly swarm also highlights a strong northeast-southwest trend that can be interpreted as potentially extending through the new BE/W application area and into the southwestern end of the BST ground at Aurum’s nearby Gemou prospect.
Aurum’s soil sampling has already defined a priority drill target at Gemou, however, it hasn’t had enough drill rigs on hand to get to it… yet.
The company has 10 rigs operating across its Boundiali and Napié projects on other priority targets and expanding its resources.
The new BE/E application area is contiguous with the southeast extremity of the BST ground and spans structures passing south and southwest of the 70km-long BM ground and any extensions south of the BD ground.
Future soil sampling and mapping will quickly define the significance of any structural continuities, but for now, BE/E is a useful southern bookend to the Boundiali tenements.
Aurum can increase its interest in each tenement under the deal, from 30 per cent to 51 per cent, by completing 4000 metres of diamond drilling within each licence area.
The company may further increase its interest from 51 per cent to 80 per cent by either completing a further 8000m of diamond drilling or by spending US$2.5M (A$3.875M) on exploration, including the initial 4000m of diamond drilling costs.
The nominal exploration expenditure includes a diamond drilling cost of US$140 per metre of drilling, working capital, assay costs, all geochemistry and geophysical studies, trenching, air core and reverse circulation drilling and community relations.
The agreement also extends to any post-mining licence and development stage per operation, should a mining licence be granted over any part of the Encore project.
If a mining decision is made, ownership will be structured so Aurum, via Plusor, holds 80 per cent of the mine and Encore Resources and the Côte d’Ivoire government will each hold 10 per cent.
If Encore Resources elects not to contribute its 11.11 per cent pro-rata share of capital expenditure for mine development, Plusor will fund all the development costs, Encore’s interest in the mine will fall to 5 per cent and Plusor’s interest will jump to 85 per cent of the joint venture.
Aurum will start planning its first round of exploration, including a diamond drilling program on each licence area to meet its earn-in milestone, once the permit applications are approved. The company will also work with Encore, through Plusor, to achieve exploration licences for both newly acquired tenement areas.
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