With due diligence now completed on the acquisition of Nigeria Gold Pty Ltd, Australian Mines (ASX: AUZ) moves a step closer to exploring for gold in the largely underexplored northern region of Nigeria.
Australian Mines said it anticipates Nigeria Gold will finalise its due diligence by mid-January.
Australian Mines now holds around 4,094 kilometres square of exploration licenses and exploration license applications, which have been granted or are pending to be granted, in three main areas of north-western Nigeria.
Consideration for the transaction will be all scrip, comprising between 195 million Australia Mines shares (post a 1:20 share consolidation by the company), or 336 million shares, depending on a combination of certain milestones.
These milestones need to be achieved by Australia Mines with its Australian gold assets, and Nigeria Gold acquiring outstanding high priority exploration license agreements and defining JORC resources.
Australia Mines said it will review its funding alternatives for exploration, which includes proceeds from the Mt Martin gold mine, as the company recently finalised a mine design that indicates the open pit cutback will be profitable under various treatment options, and the current high gold price.
In a major benefit to miners and explorers in the country, the Nigerian Government is committed to exploration and development of its resources and has recently modernised its Federal Mining Act.