GoldMining Inc. [GOLD-TSX, GLDG-NYSE American] said it has signed a binding term sheet granting Australian Mines Ltd. [AUZ-ASX] the option to acquire up to an 80% interest in the companys Boa Vista project in Para State, Brazil.
Under the agreement, GoldMining can receive cash and equipment payments totaling up to $7 million. GoldMining currently owns an indirect 84.05% interest in the project and, if the option is exercised in full, will retain a 20% interest at such time.
GoldMining controls a diversified portfolio of resource-stage gold and copper-gold projects in Canada, the U.S., Brazil, Colombia and Peru. The company also owns approximately 21.5 million shares of Gold Royalty Corp. [GROY-NYSE American], 9.9 million shares of U.S. Gold Mining Inc. [USGO-NASDAQ], and 25.1 million shares of NevGold Corp. [NAU-TSXV].
GoldMining CEO Alastair Still said the agreement with AUZ positions his company to unlock value from Boa Vista, while allowing management to focus its attention on advancing its key assets, such as the Sao Jorge Project in Brazil, where the company recently announced its largest drilling program to date.
GoldMining is planning to complete 5,000 metres of drilling at the Sao Jorge Project, which is located in the south-central portion of the Amazon Craton.
Meanwhile, key earn-in details related to the Boa Vista project are as follows;
AUZ will pay an initial cash payment of $55,000 and issue $884,000 ordinary shares.
Under the first option, AUZ has three years to earn a 51% interest in the project. It can earn that interest by completing a minimum of $3.9 million in exploration expenditures, including a minimum of 6,000 metres of diamond core drilling. It must also make three annual cash payments of $250,000.
AUZ is also required to announce a JORC-compliant mineral resource estimate of at least 500,000 gold ounces, including at least 250,000 ounces in the measured and indicated categories. Once the first option conditions are met, the two companies will form a joint venture (51/49 respectively) on industry standard terms with AUZ acting as the initial operator.
Under the second option, the AUZ can earn a further 19% in the project (to 70%) within three years from the date of completion of the first option. To exercise that option, it must complete a feasibility study containing a JORC, and NI 43-101 compliant mineral reserve of more than 250,000 ounces of gold.
Under the third option, the Australian company can earn a further 10% project stake by paying $4.42 million (50% in cash).
The Boa Vista project is located in Tapajos Gold District, 350 kilometres south of the main regional city of Itaituba. The project is accessible by roads. The project covers three exploration permits and includes an area of approximately 9,201 hectares. GoldMining owns 84.5% of the project with Majestic D&M Holdings LLC, owning the remaining 15.95%.
On Monday, GoldMining shares rose 1.02% or $0.01 to 99 cents. The shares trade in a 52-week range of $1.44 and 98 cents.
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