Loncor Resources Inc. announces that its subsidiary, Loncor Resources Congo SARL, has entered into a joint venture agreement with Randgold Resources (DRC) Limited.
The Agreement provides for a joint venture (the "Joint Venture") between Loncor and Randgold covering all of the exploration permit areas comprising Loncor's Ngayu project, other than certain parcels of land surrounding and including the Makapela and Yindi prospects which are retained by Loncor and do not form part of the Joint Venture. Randgold shall have certain preemptive rights over these two areas.
Randgold will manage and fund all exploration of the permit areas until the completion of a pre-feasibility study on any gold discovery meeting the investment criteria of Randgold.
Once the Joint Venture has determined to move ahead with a full feasibility study, a special purpose vehicle ("SPV") would be created to hold the specific discovery areas. Subject to the Democratic Republic of the Congo's free carried interest requirements, Randgold would retain 65% of the SPV with Loncor holding the balance of 35%. Loncor will be required, from that point forward, to fund its pro-rata share of the SPV in order to maintain its 35% interest or be diluted.
The closing of the Agreement, which is expected to occur by February 28, 2016, is subject to certain closing conditions customary for transactions of this nature.