Junior Australian gold explorer Castle Minerals (ASX: CDT) has signed a US$11.7 million agreement with private West African company Iguana Resources Limited which will see Iguana to earn up to 80% interest in the Degbiwu and Gbiniyiri licences in the Upper West region of Ghana.
The agreement was signed by Castle’s wholly-owned, Ghana-based subsidiary Carlie Mining Ltd and will allow Iguana to earn its interest in three stages over a five year period.
In the first stage, Iguana stands to earn an initial 51% interest in both licences by sole funding US$4.72 million on exploration activities over three years, with a minimum spend in the first year of US$1.22 million on Degbiwu and US$500,000 on Gbiniyiri.
Stage two will allow the company to earn an additional 14% by sole funding US$1.5 million on exploration in the fourth year, while the third and final stage will allow for 15% through a US$5.5 million spend in the fifth year.
Under the terms, Iguana must also spend a minimum US$250,000 before it can withdraw from the agreement.
If Iguana decides not to sole fund any of the stages, Carlie and Iguana will enter into a joint venture agreement to co-fund exploration.
Managing director Stephen Stone said the agreement will serve to expedite Castle’s exploration program in Ghana.
“[This agreement] will see an acceleration in exploration activity on these prospective licences, in particular at the Kpali target [within Degbiwu] where we have previously outlined an open-ended inferred mineral resource of 107,200oz gold,” he said.
Iguana is expected to commence initial work this year, focusing on five key target areas including Kpali and the Bundi gold-zinc prospect, also within Degbiwu.
The Degbiwu and Gbiniyiri licences are located in the Upper West region of Ghana and have been explored by Carlie principally for gold.
They are adjacent to and largely surround the Wa gold project owned by Azumah Resources (ASX: AZM) which has a discovered and delineated resources of 2.8 million ounces and an ore reserve of 1Moz.
Azumah is currently compiling a feasibility study for the establishment of a long life, multi-open-pit based mining operation incorporating a regional processing facility which could treat third party material such as that from the Carlie deposits.
Azumah is a Perth-based company focused on exploring and developing the Wa project, which comprises three main deposits at Kunche and Bepkong, adjacent to the Black Volta river and Ghana’s border with Burkina Faso, and at Julie approximately 80km to the east.
Azumah holds a 12.4% interest in the issued capital of Castle Minerals and is its largest individual shareholder.
Iguana is a Ghanaian-owned and based exploration company focused on early stage exploration of a growing portfolio of regional mineral interests.
Its management team is comprised of experienced geological and mining executives from Ghana’s exploration and mining industry.
At midday, shares in Castle were trading 100% higher at $0.012, while shares in Azumah Resources were steady at $0.016.