Gold explorer OreCorp (ASX: ORR) has completed its earn-in requirements to pin down a 51% interest in the Nyanzaga gold project in Tanzania and has entered an agreement to lock-in 100% of the project.
Through its local subsidiary, OreCorp said that it has now completed its earn-in obligations to secure 51% of Nyanzaga, in accordance with the earn-in agreement signed in September 2015 with Acacia Mining.
Under the earn-in terms, OreCorp was to spend US$14 million on completing a pre-feasibility study and related work. OreCorp also payed US$3 million to Acacia, with both activities and payments bringing its holding in the project to 51%.
The prime reason for acquiring a greater stake in Nyanzaga has been an increasingly growing body of explorational evidence to suggest a strong mining operation could be developed.
The project currently hosts a mineral resource of 3.1 million ounces at 4 grams per tonne gold with a definitive feasibility study for project financing purposes “currently underway”, according to OreCorp.
Full project acquisition
OreCorp has also signed a binding conditional heads of agreement with Acacia to allow OreCorp to move to 100% ownership of Nyanzaga.
This will be done via a further US$7 million to be paid at a future date. Acacia will also retain a net smelter return royalty (NSR), capped at US$15 million.
Interestingly, the NSR’s mid-price has been set to US$1,600 per ounce – below which Acacia will receive a 1% royalty and stands to receive 2% if the price is above the benchmark.
News that OreCorp is now on its way to owning the entirety of Nyanzaga helped its shares rally 56% today to trade at A$0.265 per share by early afternoon.
However, the acquisition is dependent on OreCorp and Acacia securing Tanzanian regulatory approvals and mining licences from the country’s Fair Competition Commission and recently installed Mining Commission.
More about OreCorp
OreCorp is a Western Australian-based mineral company with gold and base metal projects in Tanzania and Mauritania.
According to its latest company report, OreCorp is well-funded, has no existing debt, and has existing key projects across Africa, namely the Nyanzaga gold project in north-west Tanzania and the Akjoujt South nickel-copper project in Mauritania.