Posted in | Gold | Mining Business

Orca Gold Receives Approval for Acquisition of Morondo and Korokaha North Exploration Licenses

Orca Gold Inc. is pleased to announce that Monsieur Jean Claude Brou, Minister of Industry and Mines of the Republic of Côte d'Ivoire, has approved the transfer of a wholly-owned Kinross Gold Corporation subsidiary that holds the Morondo and Korokaha North exploration licenses and the Korokaha South application to Orca.

In addition, the Minister has advised the Company that formal written approval is in process for the transfer of the remaining Ivorian exploration assets contemplated under the share purchase agreement between wholly-owned subsidiaries of Kinross, Orca and a wholly-owned subsidiary of Orca (the "SPA") (see Company news release on February 1, 2017). Collectively, the exploration properties covered by the SPA form a strategic portfolio for Orca's expansion in West Africa.

Having received formal written approval for the transfer of the Morondo and Korokaha North permits, the most advanced and higher priority properties within the aggregate land package, and having been advised by the Minister that the second approval is in progress, the Company and Kinross have mutually waived the requirement in the SPA to obtain all approvals from the Minister will now proceed with the closing of the Transaction.

HIGHLIGHTS

  • Orca has received, and been advised it will receive, ministerial approval in Côte d'Ivoire for the acquisition of three licenses and four applications from Kinross totaling 1,826km2 (see Figure 1 in News Release)
     
  • Together with three existing applications made by Orca, the Company will have a land package covering 2,890km2 in the country upon closing of the transaction
     
  • Morondo, which hosts a gold discovery made by Red Back Mining in 2010, is a priority target and Orca intends to immediately initiate exploration on the property, including a 2,000m drill programme
     
  • Gold mineralisation at Morondo (best intercept of 60m at 1.51g/t gold) covers an area of 600m by 200m and is open in all directions
     
  • Following completion of the transaction, Kinross will own 6.6% of Orca's shares under the terms of the SPA

DETAILS

The Kinross portfolio includes three licenses and four applications covering an area of 1,826km2 (collectively, the "Exploration Assets"). The Korokaha North licence and Korokaha South application lie adjacent to the east of Randgold's Tongon Mine in the highly prospective Senoufo Greenstone Belt. The Morondo permit lies at the junction of the Senoufo and Boundiali Greenstone belts to the south west. The Bassawa licence and Satama-Sokoura application are located on the southern extension of the Houndé Belt. The Zuénoula Ouest and Zuénoula Est applications are located north west of Perseus's Yaoure project (See Figure 1 in News Release).

The Exploration Assets have received little or no exploration. The most advanced property in the portfolio is Morondo, where a discovery was made by Red Back Mining Inc. in 2010. Gold mineralisation has been identified by trenching and 4,284m of shallow (70m) reverse circulation drilling (best intercept 60m at 1.51g/t gold) over an area of 600m x 200m and is open in all directions (See Figure 2 in News Release). Initial metallurgical test work on fresh rock samples from Morondo showed recoveries over 90%. Orca plans to commence exploration as soon as possible, including an initial 2,000m drill programme to test the depth extent of mineralisation before the end of the year.

Orca has three additional applications in its own right for licences totaling 1,064km2 in the region of the Morondo and Korokaha licenses. Combined with the acquisition from Kinross, this represents a significant land holding covering 2,890km2 on structural trends that host major gold mines. Reconnaissance exploration will commence shortly and will comprise prospecting, geological mapping and soil sampling, developing a pipeline of targets over the next six months.

Commenting on the approval by the government of Côte d'Ivoire to the agreement with Kinross, Rick Clark, CEO and Director of Orca, said, "We very much appreciate the confidence His Excellency, the Minister of Industry and Mines, has shown in our Company and we look forward to aggressively advancing our new property portfolio in this geologically prospective country. The consent by the Minister to our agreement with Kinross expands Orca's operations to another highly prospective geological environment in Africa. The original Red Back team first pegged these properties back in 2009 and we are keen to get back on the ground and explore their potential. We are also pleased to welcome Kinross as a significant shareholder of Orca and look forward to reporting to all our shareholders on the progress of our exploration efforts in Côte d'Ivoire."

Under the terms of the Agreement with Kinross, upon closing Orca will:

  • issue 10,633,169 common shares to Kinross, which are subject to a statutory hold period of four months, representing 6.6% of the post-acquisition share capital of Orca;
     
  • grant to Kinross a right to maintain its proportionate equity interest in the Company through participation in Orca's future equity financings, provided that at the applicable time Kinross holds a minimum equity interest in Orca of 5%;
     
  • grant to Kinross a two-year right of first refusal on any subsequent disposal of the Exploration Assets, in whole or in part, by Orca;
     
  • grant to Kinross a right of first offer on the Exploration Assets to take effect upon the expiry of the two-year right of first refusal; and
     
  • grant to Kinross a 2% net smelter return royalty on products mined and sold from the Exploration Assets.

Source: http://www.orcagold.com/

Tell Us What You Think

Do you have a review, update or anything you would like to add to this news story?

Leave your feedback
Submit