Kainantu Resources Ltd (TSX-V:KRL) (KRL), an Asia-Pacific focused gold mining company, said it is moving ahead with the completion steps to acquire control of the May River project in the world-renowned copper-gold district of Frieda River, Papua New Guinea.
The previously-announced acquisition saw the gold miner enter into two separate definitive purchase agreements with ASX-listed Niuminco and Hardrock, a private company.
Once complete, the deals will see Kainantu gain control of the highly-prospective copper and gold mineral concessions, known as the May River project, through the acquisition of two holding companies.
READ: Kainantu Resources files second interim results showing sound closing cash position
The area consolidates the following three adjoining tenements and is less than 15 kilometers (km) away from the PanAust owned, world-renowned Frieda River project.
- EL2603 - May River 331 km² Hardrock Skiraisa, Foya, Mountain Gate
- EL2623 - Hotmin 1272 km² Hardrock Various Au-Cu drainage anomalies
- EL2527 - Iku Hill 94 km² Niuminco (ND) Ltd. Iku Hill
The trio of tenements were previously contained in one license (EL1441), which was controlled by Niuminco and subsequently separated into different holdings and owners in 2018/2019.
According to the company, all tenements are highly prospective for copper and gold and are located in close proximity to the world-renowned Frieda River Copper-Gold Project, with the district known for both porphyry and high-sulphidation epithermal styles of mineralisation trending along the Fiak Fault.
“In relation to EL2603 (being the tenement subject to a definitive agreement with Hardrock), the key prospects of Skiraisa, Foya, Eserebe and Mountain Gate are situated along a 7-km long N-NW trending structural corridor; exhibiting many attributes similar to the extended mineralized system identified at the Frieda River Copper-Gold project,” the miner said.
Update on agreement with Hardrock
Under the definitive option agreement between Kainantu Resources, Hardrock and its shareholders, the former has an option to acquire Hardrock by way of a series of option arrangements.
The initial step entails KRL funding and completing a field study and sampling programme at May River to increase confidence and understanding of the project. Once complete, KRL has the right to exercise a first option to acquire a 10% equity interest in Hardrock.
To date, KRL has made positive progress towards completion of the study and is encouraged by initial trends that have emerged. The study is anticipated to be finalized in the coming weeks, at which point the company will provide an update and expects to finalize the Study within the coming weeks.
The definitive agreement with Niuminco
As detailed in a June press release, KRL also entered into a definitive agreement with Niuminco and its related entities to indirectly acquire EL2527 and the historical data related to the project.
“Under the Niuminco Agreement, a key condition precedent to closing remains confirmation to KRL’s satisfaction as to the “good standing” of EL2527 (with Niuminco responsible for maintaining the currency of such tenement),” the company said.
In the interim, Niuminco has advised KRL that the PNG Minister for Mining has not consented to Niuminco’s request for an extension of EL2527, and the firm has since filed to review this decision.
KRL plans to monitor the developments and said the following:
“The Niuminco Agreement has a sunset date of October 31, 2021 (or such further date as KRL may agree at its absolute discretion) for closing and satisfaction of conditions precedent (with Niuminco advising that it expects a resolution prior to this time on securing an extension of EL2527).”
Contact the writer at georgia@proactiveinvestors.com
Follow her on Twitter @MissInformd