Panthera Resources PLC (LSE:PAT) is to farm out a majority of its Labola project in Burkina Faso in return for US$18mln of exploration expenditure.
Following the farm-out, Diamond Field Resources (DFR) will own 80% of project owner Moydow, with Panthera at 20% with an option to increase the stake back up to 30% for US$7.2mln.
DFR has to spend US$18mln in exploration and development to maintain its equity interest in Moydow at 80%.
As part of the restructuring, Kalaka (Mali) and two projects in Nigeria are being spun into a new entity, Maniger, that will be run by Panthera.
Mark Bolton, Panthera’s managing director, said: “The proposed transaction with DFR provides significant finance to progress the Labola Project to the next stage, primarily the bankable feasibility study.
“Panthera's significant ongoing interest in Labola of up to 30% ensures that the company will benefit from any success, while not diluting shareholders' exposure to the company's other assets including Bassala, Bido and India.
“The 'spin out' of the Kalaka and Nigeria projects preserves our interest independent of Labola.”
DFR is listed on the TSX-V with Jean Raymond Boulle its majority owner with a 78% holding.
Moydow acquired its interest in the Labola and Kalaka projects from Panthera in 2020 and 2021 respectively.
Before today’s transaction, Panthera held a 45.8% undiluted equity interest and a 39.74% diluted equity interest in Moydow.