TIDMALS
RNS Number : 3497P
Altus Strategies PLC
07 February 2019
Altus Strategies Plc / Index: AIM / EPIC: ALS / Sector:
Mining
07 February 2019
Altus Strategies Plc
("Altus" or the "Company")
Joint Venture Term Sheet Signed on Lakanfla & Tabakorole
Gold Projects in Mali
Altus Strategies Plc (AIM: ALS & TSX-V: ALTS), the Africa
focused exploration project generator, announces that on 5(th)
February 2019 it signed a non-binding Term Sheet ("Term Sheet") for
a Joint Venture ("JV") with Indiana Resources Ltd ("Indiana") which
is listed on the Australian Securities Exchange ("ASX"). Subject to
entering a definitive agreement ("Agreement") with Altus, Indiana
will have the option to earn up to an 85% interest in Legend Mali
(BVI) II Inc. ("Legend"), a wholly owned subsidiary of the Company.
Legend holds a 100% interest in the Lakanfla and Tabakorole gold
projects ("Projects") located in western and southern Mali
respectively. Indiana may earn its interest by funding the
exploration and development of the Projects. The Term Sheet is
subject to exclusivity provisions for 60 days following
signing.
Highlights:
-- JV Term Sheet signed with ASX listed Indiana Resources Ltd
-- Indiana may earn up to an 85% interest in the Lakanfla and Tabakorole gold projects:
o Lakanfla historical drill results include: 26.0m at 5.10 g/t
Au and 12.0m at 9.78 g/t Au
o Lakanfla is located 6km southeast of the Sadiola gold mine
o Tabakorole historical drill results include: 60.0m at 2.92 g/t
Au and 44.0m at 3.30 g/t Au
o Tabakorole and Lakanfla are two of six exploration projects
owned by Altus in Mali
-- Subject to entering a definitive agreement:
o Altus to receive milestone based cash and equity in
Indiana
o Altus to retain a 2.5% Net Smelter Return ("NSR") royalty
o Altus will be the operator of the JV during initial earn-in
periods
-- Agreement remains subject to due diligence and other conditions precedent
Steven Poulton, Chief Executive of Altus, commented:
"We are delighted to have signed this Term Sheet with Indiana
for a JV on our Lakanfla and Tabakorole gold projects in Mali. Upon
entering a definitive Joint Venture agreement, Indiana will have
the option to acquire up to an 85% interest in the projects. In
return it is anticipated that Altus will receive an upfront equity
payment in Indiana shares, future milestone based payments of cash
and Indiana equity and a 2.5% NSR on the Projects. Indiana is a
dynamic ASX listed exploration company with existing gold projects
in Mali. We look forward to concluding the final agreements and to
working with them thereafter. This transaction underscores the
Company's 'project generator' strategy of making and monetising
mineral discoveries in Africa, while building and growing a
valuable portfolio of royalty interests.
Strategically located adjacent to the world renowned Sadiola
gold mine in western Mali, at which oxide resources are reportedly
being exhausted, the Lakanfla project contains a major area of
historical artisanal gold workings and historical drilling results
including 5.10 g/t Au over 26.0m, 9.78 g/t Au over 12m and 5.61 g/t
Au over 14.5m. Based on our review of historical data, we believe
that Lakanfla hosts a potentially substantial karst-style gold
target, analogous to the adjacent FE3 and FE4 pits of the Sadiola
mine. Separately the Tabakorole project, which is located in
southern Mali targets a shear zone which has reportedly been mapped
for 2.7km long and up to 200m wide. Historical drilling results to
date at Tabakorole include 2.92 g/t Au over 60.0m and 3.30 g/t Au
over 44.0m.
In addition to this transaction, discussions are continuing with
Canyon Resources Ltd in respect of the Company's existing bauxite
joint venture in Cameroon as announced by the Company on 11 October
2018. We look forward to updating shareholders on the progress with
these transactions in due course".
Headline JV Terms
Subject to the execution of the Agreement, Indiana will have the
option to earn up to an 85% interest in the Projects on the
following headline JV terms.
- Stage 1 (Exploration): Indiana will have the right to earn an
initial 25% interest in the Projects by undertaking 3,000m of
drilling at the Lakanfla project and by completing an exploration
programme at the Tabakorole project within 12 months of entering
the Agreement. Altus will receive US$100,000 of Indiana shares on
the commencement of Stage 1.
- Stage 2 (Resource Definition): Within 30 days of the
completion of Stage 1, Indiana will have the right to increase its
interest in the Projects (or Lakanfla only) to 51% by undertaking
9,000m of drilling at the Lakanfla project (or publishing a JORC
compliant resource of more than one million ounces of gold) and
2,500m of drilling at the Tabakorole project, within 18 months of
electing to enter Stage 2. Altus will receive US$100,000 in cash
and US$200,000 of Indiana shares on the commencement of Stage
2.
- Stage 3 (Definitive Feasibility Study): Within 30 days of the
completion of Stage 2, Indiana will have the right to increase its
interest in the Projects (or Lakanfla only) to 70% by completing a
Definitive Feasibility Study at the Lakanfla project and, if it
elects to continue with the Tabakorole project as part of the JV,
publishing a maiden JORC compliant resource at Tabakorole within 24
months of electing to enter Stage 3. Indiana will relinquish its
interest in Tabakorole if it does not so elect. Altus will receive
US$100,000 in cash and US$200,000 of Indiana shares on the
commencement of Stage 3.
- Stage 4 (Mine Construction): Within 30 days of the completion
of Stage 3, Altus will have the option to co-finance Stage 4 pro
rata to its interest in the JV, or grant Indiana the right to sole
finance Stage 4 and increase its interest in the Projects (or
Lakanfla only) to 85% by commencing gold production on either of
the Projects (or the Lakanfla project only if the Tabakorole
project is no longer part of the JV) within 24 months of electing
to enter Stage 4. Altus will receive US$500,000 in cash and
US$750,000 of Indiana shares on the commencement of Stage 4 if
Indiana is sole funding Stage 4.
Altus will be the operator of the Joint Venture during Stages 1
and 2 on an "at costs plus 10%" basis. Exploration budgets and work
programmes will be agreed by a JV committee consisting of up to two
representatives of each of Indiana and Altus. Each party shall have
one vote, however any party sole-funding will have a casting vote.
If co-funding, each party shall vote in accordance with its
participating interest in the JV.
Indiana may withdraw from the JV at any time. If Indiana elects
to withdraw from the JV at any stage after the completion of Stage
2 it will receive a 0.75% NSR royalty on future gold production
from the Projects in exchange for withdrawing. This NSR royalty
will be capped at the amount invested in the JV by Indiana at the
point of withdrawal and can be repurchased by Altus at any time for
a cash sum equivalent to this amount plus a 10% premium. Indiana
has the option to offer Altus the right to co-fund the JV from
completion of Stage 3. Altus will retain a 2.5% NSR royalty on the
Projects. Either party may sell its interest in the JV but must
first offer it to the other party at the price and terms offered by
the new purchaser. If Indiana sells its interest in the JV it will
not receive the NSR royalty that it would have otherwise received
from having withdrawn from the JV.
The Agreement is expected to include standard change of control
and default provisions and will also provide for Indiana with the
option to request a 3 month pause of JV operations at any time
after the completion of Stage 1.
Lakanfla Project: Location
The 24km(2) Lakanfla gold project is located 5km east of the
Company's Diba ('Korali Sud') oxide gold project and approximately
6.5km southeast of the karst-type FE3 and FE4 open pits of the
multi-million ounce Sadiola gold mine and 35km southeast of the
former multi-million ounce Yatela karst-type mine. Lakanfla is
bounded by the Sadiola permit area on its north, west and southern
boundaries. Sadiola and Yatela are both part owned by Anglogold
Ashanti (JSE: ANG, NYSE: AU and ASX: AGG) and IAMGOLD Corporation
(TSX: IMG & NYSE: IAG).
Lakanfla Project: Karst Geology
Karst style deposits are known to form from the dissolution and
collapse of carbonate (limestone) rocks. The weathering of these
rocks, if originally mineralised with low grade gold and sulphides,
can result in the precipitation of a higher grade 'supergene' and
potentially economic gold mineralised residuum, above a more
resistant basal layer. The dissolution of the limestones often
means such deposits are associated with geophysical gravity lows,
resulting from the formation of voids at depth. They may also
contain sands and other more recent geological materials occurring
unconformably in the geological sequence. These materials will have
either been blown or collapsed into the depression created during
the karstification (dissolution) process.
Lakanfla Project: Karst Targets
At Lakanfla a consistent series of gravity lows exists, as
defined by a ground gravity survey completed in 2014, which are yet
to be drill tested. The lows are up to 0.5km wide and have a total
strike length of approximately 4km. They are hosted within
marbleised lithologies surrounding a granodiorite intrusion and its
associated hydrothermal aureole. Surface sagging features,
considered to be a result of the formation of dissolution voids at
depth, have been mapped as being more than 100m long in places and
these are also often coincident with the gravity lows. A number of
the gravity lows are adjacent to N-S trending artisanal gold
workings and are coincident with apparent gradient array IP
resistivity lows. Interpretation of the residual IP anomalies has
defined a series of intersecting regional and local shear
structures, which are considered to have potentially promoted the
karst formation process. The gravity lows and lithological trends
may indicate areas of deep weathering of altered calcareous
sediments, dissolution collapse and potential supergene gold
deposition.
None of the priority targets have been systematically drill
tested to date. Of the historical drilling that has been undertaken
at Lakanfla, 35 holes coincide with the priority targets. However,
the majority of these holes were drilled were no deeper than 75m
vertical depth. One was drilled deep enough to test the karst
potential, attaining a vertical depth of 161m. Critically, this
drill hole (04KDD-08) was located on the margin of a gravity low
reached the target depth and terminated in loosely consolidated
sand (from 165m to 171m), having also passed through voids and
unconsolidated material. The Company considers that this hole
provides strong evidence for the presence of a potential karst-type
system.
Lakanfla Project: Exploration History
Historical exploration at Lakanfla has included soil sampling
across the entire licence area, on a 500m x 250m (and in places
250m x 100m) sample grid. The programme defined a number of
anomalies which were further refined by shallow auger drilling.
Follow up diamond, RC and RAB drilling programmes primarily
targeted shallow gold mineralised breccias. A number of selected
historical intersections are highlighted in Table 1. The breccias
are also the primary target for artisanal gold miners, the workings
of which extend for approximately 2.5km of strike length. The
majority of the drilling at Lakanfla was completed between 2001 and
2011.
Table 1: Selected Lakanfla selected historical shallow drill
intersections
Hole ID From (m) To (m) Intersection (m) Grade (g/t Au)
04KRC-02 32.00 58.00 26.00 5.10
01KRAB-03 12.00 24.00 12.00 9.78
04KDD-06 34.00 48.50 14.50 5.61
04KDD-04 105.00 165.00 60.00 1.02
Intersections in Table 1 are calculated based on a greater than
0.5 g/t Au cut-off grade, a top-cut of grades above 40 g/t and
where there is <= 3m of consecutive internal waste.
A series of geophysical programmes have been completed at
Lakanfla, including ground based induced polarisation, high
resolution resistivity, magnetic and gravity surveys as well as
airborne VTEM and gravity surveys. Significantly, the completion of
the ground gravity survey, which generated the Karst targets on the
margins of the granodiorite intrusion, post-dates all of the
drilling completed at Lakanfla to date.
Tabakorole Gold Project
The 100km(2) Tabakorole project is located in southern Mali,
approximately 280km south of the capital Bamako. The project sits
on the Massagui Belt which hosts the 7.0Moz Morila gold mine
operated by Randgold Resources Ltd. Exploration to date has
identified a 2.7km long shear zone which is up to 200m wide. A
number of selected historical intersections are highlighted in
Table 2.
Table 2: Selected Tabakorole project historical drill
intersections
Hole ID From (m) To (m) Intersection (m) Grade (g/t Au)
05FLRC-11 14.00 74.00 60.00 2.92
05TKRC-18 24.00 68.00 44.00 3.30
10FLRC-07 4.00 42.00 38.00 2.64
10FLSRC-02 10.00 24.00 14.00 6.66
Intersections in Table 2 are calculated based on a greater than
0.5 g/t Au cut-off grade, a top-cut of grades above 40 g/t and
where there is <= 3m of consecutive internal waste.
A regional soil sampling programme completed on a 500m x 100m
grid has defined a strong gold in soil anomaly at Tabakorole. The
programme was completed by BHP in the early 1990s. Since 2003 a
total of 28,912m of diamond, 31,943m of RC, 6,577m of auger and
60,676m of air core drilling have reportedly been completed, in
addition to 1,400 line-km of airborne geophysics. A more recent 14
hole RC infill drilling program (totalling 741m) has reportedly
confirmed the continuity and grade of oxide mineralization at
Tabakorole, as projected from the deeper sulphide
intersections.
Cautionary note regarding historical data
Readers are cautioned that the data on Lakanfla and Tabakorole
as referred to in this written disclosure is historical exploration
data that has not been verified by a Qualified Person. Not all
historical samples are available and Altus does not have complete
information on the quality assurance or quality control measures
taken in connection with the historical exploration results, or
other exploration or testing details regarding these results. There
has been insufficient exploration to define a current resource and
the Company cautions that there is a risk further exploration will
not result in the delineation of a current mineral resource. The
historical data should therefore not be relied upon until the
Company can confirm it.
Qualified Person
The technical disclosure in this regulatory announcement has
been read and approved by Steven Poulton, Chief Executive of Altus.
A graduate of the University of Southampton in Geology (Hons),
Steven Poulton also holds a Master's degree from the Camborne
School of Mines (Exeter University) in Mining Geology. He is a
Fellow of the Institute of Materials, Minerals and Mining and has
over 20 years of experience in mineral exploration and is a
Qualified Person under the AIM rules and National Instrument 43-101
Standards of Disclosure of Mineral Projects of the Canadian
Securities Administrators.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Glossary of Terms
The following is a glossary of technical terms:
"Artisanal" means local people conducting mining, often with
rudimentary equipment
"Au" means gold
"g/t" means grams per tonne
"Grade" means the quantity of ore or metal in a specified
quantity of rock
"km" means kilometre
"m" means metres
"Shear zone" means a zone in which rocks have been deformed by
lateral movement along parallel planes
For further information you are invited to visit the Company's
website www.altus-strategies.com or contact:
Altus Strategies Plc Tel: +44 (0) 1235 511 767
Steven Poulton, Chief Executive E: info@altus-strategies.com
SP Angel (Nominated Adviser) Tel: +44 (0) 20 3470 0470
Richard Morrison / Soltan Tagiev
SP Angel (Broker) Tel: +44 (0) 20 3470 0471
Richard Parlons / Jonathan Williams
Blytheweigh (Financial PR) Tel: +44 (0) 20 7138 3204
Tim Blythe / Camilla Horsfall / James
Husband
About Altus Strategies Plc
Altus is a London (AIM: ALS) and Toronto (TSX-V: ALTS) listed,
diversified and Africa focused mineral exploration project
generator. Through our subsidiaries we discover new projects and
attract third party capital to fund their growth, development and
ultimately exit optionality. This strategy enables Altus to remain
focused on the acquisition of new opportunities to be fed into the
project generation cycle and aims to minimise shareholder dilution.
Our business model is designed to create a growing portfolio of
well managed and high growth potential projects and royalties,
diversified by commodity and by country. Altus currently has
eighteen projects in six commodities across six countries. We aim
to position our shareholders at the vanguard of value creation, but
with significantly reduced risks traditionally associated with
investments in the mineral exploration sector.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this news release contain forward-looking
information. These statements address future events and conditions
and, as such, involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the statements.
Such factors include without limitation the completion of planned
expenditures, the ability to complete exploration programmes on
schedule and the success of exploration programmes. Readers are
cautioned not to place undue reliance on the forward-looking
information, which speak only as of the date of this news
release.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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