Sarama Resources Ltd. (the "Company" or "Sarama") advises that pursuant to the Earn-In Agreement (the "Agreement") between Sarama and Acacia Mining plc ("Acacia") in respect of the South Houndé Project (the "Project") in Burkina Faso (refer News Release November 27, 2014), Acacia has achieved the minimum required expenditure of USD 7 million and met all conditions required to attain a 50% equity interest in the Project.
Under the terms of the Agreement, Acacia was required to sole-fund Project exploration and related expenditures of USD 7 million for the initial 2 years of the earn-in period in order to attain a 50% equity interest in the Project. Acacia has the option to sole-fund a further USD 7 million exploration and related expenditures through years 3 and 4 of the earn-in period to attain an additional 20% equity interest in the Project. If earn-in milestones are achieved within the required time-frames, Acacia then has the right to acquire an additional 5% interest by declaring a minimum mineral reserve of 1.6 million ounces of gold for the Project.
Acacia continues to see potential and has advised that it intends to continue funding exploration as per the terms of the Agreement and has approved an exploration budget of USD 4 million for the Project in 2017. Acacia's aim is to increase the current inferred mineral resource of 2.1Moz Au1,2 by targeting depth extensions to high-grade shoots and discovery of other structurally-controlled mineralisation within the mineral resource area as well as satellite deposits in regional areas of the Project. Acacia's proposed exploration program includes 12,000 metres of diamond core, 10,000 metres of reverse circulation and 28,000 metres of aircore drilling.
Pursuant to the Agreement, Acacia has elected to take over management of the Project which will allow Sarama's team to focus exploration efforts on its 100% owned Bondi deposit (historical estimate of 282koz Au measured and indicated, and 150koz Au inferred)5,6 and Koumandara Project, both of which overlie prospective greenstone terrane within the Houndé and Banforo Belts respectively.
Sarama's President and CEO, Andrew Dinning commented:
"We are pleased that following two years and USD 7 million in expenditure, Acacia still sees the potential to commit to significantly more work and is focused on further developing the high-grade and regional picture. Acacia taking over day-to-day management of the Project also frees up Sarama's team to focus on the newly acquired Bondi Deposit and our other regional projects."