Resolute Mining has struck an earn-in agreement with African Gold that would allow it to earn up to an 80% interest in the junior’s Syama shear zone project, in the south of Mali.
The deal is set to see Resolute, become the project’s majority owner by spending $500,000 on exploration over the next two years. It would also need to start a feasibility study within five years and complete it within eight.
Mining operation
If Resolute decides to mine the asset, African Gold can elect to contribute to the development of the project to maintain its equity or dilute to a 1.5% net smelter royalty. The Western Australia-based miner already has a major operation in the area, comprising the Syama underground mine, the Tabakoroni open pit and several satellite oxide pits.
Resolute Mining chief executive Terry Holohan has been trying for years to prove Barrick’s CEO Mark Bristow wrong. As the leader of Randgold Resources, which merged with the Canadian gold miner in 2018, Bristow decided against developing the gold resource at Syama into a mining operation.
He said at the time that the project, located 300km (217 miles) southeast of the capital Bamako and about 30km (21 miles) from the border with Côte d’Ivoire, was technically too difficult to mine.
“We thought we could crack the metallurgy. We’ve now ticked the box,” said Holohan, who took over as CEO in May.
