Reunion Gold Corporation (TSX VENTURE:RGD) (the "Company") is pleased to announce that it has entered into an option agreement to acquire a 75% interest in the Dorlin Project in French Guiana from Société Minière Yaou-Dorlin ("SMYD"), a subsidiary of AUPLATA S.A., a French company listed on Alternext.
The Dorlin Project consists of an 84 km2 Exploitation Permit for gold, in the central west region of French Guiana, approximately 190 km SW of the capital Cayenne, within an area open to mining activity. The Project is underlain by rocks typical of the greenstone belts of the Guiana Shield, in the Yaou-Dorlin area, which hosts numerous small artisanal gold workings. In the 1990's substantial exploration work was conducted in the area by Guyanor Ressources and Cambior Inc. AUPLATA is carrying out a small scale alluvial gold mining operation using contractors on the Project area.
The option is subject to certain conditions precedent including the renewal of the Dorlin Project permit and the completion by the Company of technical and legal due diligence on the Project. The option will be valid for a period of five years from the date all conditions precedent are satisfied. To exercise the option to acquire a 75% interest in the Dorlin Project, the Company will have to complete and deliver a feasibility study to SMYD within a period of four years and six months of the beginning of the option period. To maintain the option, the Company has to spend at least US$3 million in the first three years. Once the option is exercised, SMYD will have to choose between maintaining a 25% participating interest ("PI") or a 5% net profit interest ("NPI"). If SMYD chooses a 25% PI, Reunion will have the option to acquire an additional 5% PI from SMYD for a consideration based on the NPV in the feasibility study.
The Dorlin Project is subject to a 0.5% royalty payable to Euro Ressources, a subsidiary of Iamgold. SMYD filed an application to renew the Dorlin permit in July 2015 and it is still pending.