Panthera Resources PLC (AIM:PAT) has announced further progress on the restructuring of its restructuring of Moydow Holdings Limited.
In August 2021, Panthera announced that it had entered into definitive agreements to restructure its ownership interests in Moydow and its underlying assets.
The proposed transaction allows Diamond Fields Resources Inc to provide funding to the Labola project in Burkina Faso of up to US$18mln in return for an 80% stake.
DFR has now secured conditional equity funding commitments of US$3.1mln, at a premium to the current share price, from existing shareholders, management, and directors.
Part of the proceeds from DFR's financing will be used on resource expansion drilling at Labola, where a maiden mineral resource estimate of more than 500,000 ounces was established in December 2021.
Drilling at Labola will recommence after the closing of the Moydow restructure, which is expected during the second quarter of 2022.
Separately, Moydow has secured an option agreement to acquire an exploration licence covering 243 square kilometres contiguous to Labola.
This new licence extends strike potential to over 30 kilometres and includes several additional zones of artisanal mining activity, the largest up to 1,000 metres long and 50 metres wide.
“The completion of the maiden mineral resource estimate in December 2021 was an important milestone for the company as it seeks to transition from explorer to developer,” said Mark Bolton, managing director of Panthera.
“The Moydow restructure and US$18mln earn-in by DFR on Labola will deliver activity and potential value accretion to Panthera shareholders for an extended period. DFR intends to commence drilling at the Labola project in the second quarter of 2022. Drilling to date only covers a small part of the identified deposit with this next phase of drilling to focus on areas of known mineralization to expand the current mineral resource estimate.
The Labola project is owned and managed by Moydow. Panthera currently holds an equity interest of approximately 40% in Moydow. A proposed restructure of Moydow and farm-in by DFR was announced on 25 August 2021.
DFR agreed to spend up to US$18mln on Labola and increase its ownership interest up to 80%, although Panthera holds the right to increase its interest by 10%, for example, from 20% to 30%, for a cost of US$7.2mln.
The Labola project lies in the Banfora Birimian Greenstone Belt, one of the three major mineralized belts in western Burkina Faso.
It is located approximately 450 kilometres west-southwest of the capital, Ouagadougou, and 100 kilometres northeast of the Wahgnion gold mine, operated by Endeavour Mining.