Emerging gold play Vector Minerals is seeking to take a 60 per cent stake in an advanced multi-million-ounce gold mine in the Democratic Republic of Congo previously owned and operated by gold major AngloGold Ashanti.
The Perth-based company has signed a Heads of Agreement with Mongbwalu Gold Mines SA and Fimosa Capital for 60 per cent of the world-class Adidi-Kanga gold mine, part of the Mongbwalu Gold Project located in the Ituri Province.
Mongbwalu Gold Mines – previously owned by AngloGold Ashanti – completed significant exploration and development activities, including 173,276 metres of diamond and RC drilling between 2005 and 2013 at the project.
A Feasibility Study was completed for the development of the Adidi-Kanga mine while initial mine construction activities had begun with the purchase and delivery to site of 70 per cent of the mechanical equipment proposed to be installed under the study.
The mine boasts a non-JORC compliant indicated and inferred mineral resource of 11.9 million tonnes at 7.65 grams per tonne gold for 2.9 million ounces.
Vector’s technical team has identified additional areas of mineralisation defined by previous wider spaced drilling by AngloGold Ashanti. This will be included in a new JORC compliant resource expected in the March 2018 quarter.
The transaction will see the establishment of a new joint venture company in the DRC including Vector (60%), Fimosa Capital (26.22%) and Société Minière de Kilo Moto (13.78%) – who Vector recently announced the execution of two binding agreements on the Kibali South and Nizi Gold projects.
Vector has already paid a $500,000 non-refundable payment to Fimosa and has transferred another $1 million into the DRC to fund Definitive Feasibility Studies (DFS) and exploration programs.
Further cash and share based consideration will be payable and issued in tranches based on execution of the deal and on satisfaction of key milestones including DFS and first commercial gold sales from the project.
The company has already secured a $10 million, three-year debt facility with UK based institutional investor to part fund acquisition and study costs.
Vector expects to complete due diligence of the historical exploration work, drilling and DFS in January.
Shares in Vector climbed as high as 2.7c today on the news. The stock was last trading at 2.6c, up 30 per cent.