Colonial Resources (ASX: CLN) has entered into a Sale of Shares Agreement with Central African Gold to acquire 80% equity interests in each of Mali Goldfields and Songhoï Resources for up to US$5 million.
The company will acquire 80% interest in 18 prospective permits spanning circa 1,883km² with a 653,000 ounce gold resource base of indicated and inferred resources grading 3.17g/t Au, with 522,000 oz attributable to CAG.
Colonial to undertake an Entitlements Offer, subject to Australian Securities Exchange approval, to raise approximately A$7.84 million before costs.
Subject to CAG and Colonial shareholder approval and a successful capital raising by Colonial to fund the purchase consideration.
Newly appointed managing director Alan Campbell said the acquisition of the Malian Assets representsed an opportunity to secure a significant portfolio of tenements in a world class gold region that will add significant growth potential for Colonial, as well as increasing the diversity of its project portfolio.
Under the terms of the Agreement the consideration will comprise an initial payment of US$600,000, a further payment of US$3.4 million on completion of the transaction and a final payment of $US1.0 million payable on achievement of a JORC compliant Indicated and Measured Resource of not less than 500,000 ounces of gold.
The acquisition of the Malian Assets is conditional on, inter alia, CAG shareholder approval, Colonial shareholder approval, and completion of a capital raising by Colonial within 75 days of signature of the Agreement.
Mali Goldfields and Songhoi Resources are the beneficial owners of early stage gold exploration assets, consisting of 18 prospecting authorizations and research permits spanning circa 1883km².
The assets are located within the Kedougou-Kenieba window, a major Lower Proterozoic Birimian outlier on the NE margin of the West African Shield.