Caracal Gold PLC (LSE:GCAT) has agreed a revised share purchase agreement (SPA) to acquire Tyacks Gold Ltd, the licence holder of the Nyakafuru project in Tanzania.
The revisions include an extension of the completion date, revised commercial terms and the exclusion of the Nyakafura Reefs project and the Simba projects for the moment.
READ Caracal Gold agrees to buy interests in 2 gold projects in Tanzania
The cash element of the purchase consideration has been revised so that Caracal will pay the first tranche of US$500,000 by the end of this month and the second tranche of US$1mln by the end of July.
The share element of the transaction will be finalised in due course upside but is not expected to be materially different to what was previously announced, Caracal said.
The next steps include finalising the exploration plan and infrastructure preparation during the third quarter ahead of the start of drilling early in the fourth quarter.
"Signing the revised SPA allows us to immediately begin work on Nyakafuru with drilling to commence in the fourth quarter of 2022,” said Robbie McCrae, chief executive of Caracal.
"Since we reached the initial agreement with the vendors, we have been working collaboratively together to reach the stage where we can begin to advance the project. We have worked hard to identify and acquire a project that meets our stringent investment criteria, namely offering near-term development opportunity and significant value upside whilst complementing our current portfolio. Nyakafuru meets the brief, with proven high-grade shallow gold resources and historical mining and development studies. Nyakafura will more than double our total resource base, provide exploration potential and allow for accelerated mine development through a conventional open pit operation and conventional processing plant.
"With over 1.3mln oz in gold resources and with the planned updated resource at Kilimapesa, expected to be completed by the end of June, we consider Caracal will be well-positioned to create value for our shareholders if you consider the recent B2 Gold acquisition of OKLO Resources, which implies a value of US$100 per ounce on OKLO's 669,500oz resource. The coming quarters are expected to be transformational for our rapidly growing gold exploration and production strategy in East Africa," he added.
Shares in Caracal were up 4.2% at 0.76p in the first hour of trading.