Australia’s Vector Resources Limited (ASX: VEC) has signed two binding agreements with the Democratic Republic of Congo’s (DRC) State-owned company SOKIMO on key terms for joint ventures to be established for the exploration and development of the Kibali South and Nizi Gold Projects.
Under the terms of the agreements, Vector has been granted a 90 day period to finalise legal, technical and financial due diligence in respect to the Kibali South Gold Project and Nizi Gold Project located in the Ituri and Haut Uele Provinces in north-eastern area of the DRC.
The aim is for the establishing a new joint venture for the exploration and development of the Kibali South Gold Project and in respect to entering into an amodiation agreement for the exploration and development of the Nizi Gold Project.
The Kibali South Gold Project, which is located adjacent to and within the world-class Kibali Gold Min, has an existing inferred mineral resource of 28.1Mt at 1.63g/t gold for 1.47Mozs.
The Nizi Gold Project comprises several identified gold prospects including the Baluma Gold Oxide Project and King Leopold Gold Mine and is located 120km south east of the Kibali South Gold Project. Historical production of up to 1.45Mozs of gold reported to have been produced from the King Leopold Gold Mine during the 1900’s at grades reported to be approximately 30g/t.
It is proposed that Vector will hold a no less than a 60% interest under each agreement and up to a maximum 70% interest and will be the operator and manager of the new joint venture.
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Vector will make up-front payments to its advisors and to SOKIMO of US$350,000 within 7 days of execution of the agreements. Further cash and share based consideration of approx. US$7.50/JORC defined resource ounce, will be payable and issued in tranches on execution of the formal Joint Venture and Amodiation agreements by the parties and on satisfaction of key milestones including the completion of Definitive Feasibility Studies and first gold production for the two projects.
In addition, a 1.5% royalty on the gross sales of gold will also be payable to SOKIMO from the commencement of gold production.
Vector will be responsible for funding all exploration expenditure and meet 100% of the costs to complete the Preliminary and Definitive Feasibility Studies as well as all ongoing government and regulatory costs associated with both gold projects.
The Australian miner will also be responsible for sourcing the necessary mine funding to complete the mine development.
Vector has also reported that as a result of it executing the binding agreements with SOKIMO it has received firm commitments for a A$3,240,000 from an over-subscribed private placement to sophisticated investors.
The proceeds from the Capital Raising will be used to fund up-front costs associated with the two SOKIMO agreements, including finalisation of due diligence, legal documentation as well as ongoing due diligence on a further gold project acquisition that the Company is pursuing.