Birimian diversifies ongoing lithium exploration with the prospect of looming gold revenues

Birimian ASX BGS gold Mali mining government approval
Birimian welcomes the Mali government approving mining of the Viper and N'tiola areas.

Lithium explorer Birimian (ASX: BGS) has welcomed news that the Mali government has formally signed a decree to extend the mineral exploitation permit held by Société des Mines de Morila to the Viper and N’tiola permit areas in southern Mali, 280 kilometres from the country’s capital Bamako.

The news effectively means that Birimian is on course to add gold production revenues to its intended lithium production, as and when the explorer completes the required exploration and project development on its flagship Goulamina lithium project.

Incidentally, Birimian received a developmental boost from Goulamina after reporting it had discovered two geochemical anomalies earlier this week.

Historically prospective gold revenues

In a late announcement this afternoon, its gold aspirations were lifted with the news that the Mali government has approved mineral exploration within a project where Birimian has already conducted over 35,000 metres of drilling — namely the N’tiola and Viper prospects within the Massigui gold project.

Birimian entered into a series of agreements with Societé de Mines de Morila back in 2016, intending to commercialise the gold deposits N’tiola, Viper and Finkola permits within Massigui.

The transaction required Birimian to surrender two areas of interest from its permits and Morila to have those areas included within its existing exploitation permit.

At the time, Morila was granted a six-month option to acquire two areas of interest which the miner chose to exercise a year later in 2017.

Under the terms of the agreements, successful completion of these transactions required Morila to make payments of US$500,000 in relation to each permit and to pay Birimian a net smelter royalty for each ounce of gold Morila produced.

Birimian says that the agreements it had struck with Morila provide a “potential low-cost development solution,” with the company “retaining the upside potential of further gold discoveries,” within the Massigui project area.

Notably, the two prospects that are the subject of today’s news (N’tiola and Viper) are in close proximity to Morila’s gold mine which the miner operates as a joint-venture with gold majors Randgold Resources, AngloGold Ashanti and the Republic of Mali. To date, Morila has produced more than 6 million ounces of gold from the mine.

In its annual report in 2016, Randgold reported that hard rock mining is now completed and the project has been successfully transitioned to processing TSF material.

Today’s news means that Birimian will receive a total of $1 million in line with two agreements it had signed with Morila and can look forward to seeing early production revenues in the form of a 4% net smelter royalty assuming the spot gold price remains above US$1,200 per ounce, in accordance with the previously agreed terms.

The last time spot gold traded below US$1,200 per ounce was February 2017, while spot gold is currently trading at around US$1,303 per ounce.

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