AMN - GHANA: Earn-in deal for Wa Gold Project

Azumah Resources has entered into a binding term sheet detailing an earn-in of up to 47.5% of its Wa Gold Project in Ghana for an expenditure of US$13.5 million. The two-stage earn-in over two years is with Perth-managed private equity group Ibaera Capital GP Limited.

Azumah says the objective of the arrangement is to boost resources and reserves and deliver a fundable development project.

Under the deal, Ibaera also has the option to invest up to A$2 million in Azumah shares.

Execution of the full earn-in, investment and joint venture agreement is expected by August 31, 2017.

The objective of the deal is to boost gold resources and reserves above the present 2.1 million ounces and 624,000 ounces respectively.

Furthermore it aims to deliver within a two-year time frame, or less, a revised feasibility study to support the funding and development of the presently proposed 90,000 ounce per year gold operation.

Azumah's managing director Stephen Stone said, “This transaction represents a game changer for the company and another important step in unlocking fundamental value and achieving a market re-rating.

“It’s been a tough environment in which to build new projects and having carefully considered several options, we are very pleased to be partnering with Ibaera.

“We are looking forward to working with its team of focused and highly regarded mining industry professionals who have a proven capability in discovery and for driving major projects to production whilst employed at WorleyParsons, Fortescue Metals Group and BHP Billiton."

He says the Ibaera funding injection is expected to drive an acceleration of activities at Wa.

Azumah is exploring and developing its regional-scale Wa project. Three main deposits have been discovered and extensively drilled at Kunche, Bepkong and Julie.

To date, the company has defined a JORC 2012 mineral resource of 2.06 million ounces of gold grading 1.5 g/t gold across seven deposits. The main deposits have an ore reserve of 624,000 ounces.

Azumah completed a feasibility study for an open pit mining operation based on an initial seven-year life producing about 90,000 ounces gold per year. The company has had two, 15-year mining leases granted over its key deposits.

The company recently received an updated targeting study from geological consultants CSA Global that has confirmed 18 very high-priority and 32 high-priority target areas within a total of 140 at the 2400sqkm project. Thirty-eight of the target areas are totally new.

The study will underpin Azumah’s post-seasonal rains exploration push to increase resources to over 3.0 million ounces and reserves to over 1 million ounces.

www.azumahresources.com.au