THE BOURSE WHISPERER: Azumah Resources (ASX: AZM) has struck a binding Term Sheet deal with Perth-managed private equity group, Ibaera Capital GP Limited.
The deal enables Ibaera, to earn in two stages, up to a 47.5 per cent interest for an expenditure of US$13.5 million ~($17M) in the company’s Wa gold project in Ghana, West Africa.
Azumah Resources explained the objective of the deal is to boost The Wa project gold resources and reserves above the present 2.1 million ounces and 624,000 ounces respectively and deliver within a two-year time frame, or less, a revised Feasibility Study to support the funding and development of the presently proposed 90,000 ounces per year gold operation.
Azumah recently reported an exploration targeting review by CSA Global that highlighted an opportunity to achieve Azumah’s expectations of a lift in resources and reserves.
The study identified over 140 target areas, of which 18 were designated very high priority.
“This transaction represents a game changer for the company and another important step in unlocking fundamental value and achieving a market rerating,” Azumah Resources managing director Stephen Stone said in the company’s announcement to the Australian Securities Exchange.
“It’s been a tough environment in which to build new projects and having carefully considered several options, we are very pleased to be partnering with Ibaera.
“We are looking forward to working with its team of focused and highly regarded mining industry professionals who have a proven capability in discovery and for driving major projects to production whilst employed at WorleyParsons Ltd, Fortescue Metals Group Ltd and BHP Billiton Limited.”
Ibaera Capital manages an existing $85 million investment entity backed by European investors and has invested in six Australian assets since its inception in 2013.
Through its new closed-end private equity fund Ibaera Capital Fund LP, the investment group is mandated to invest in and develop international gold and base metals projects alongside their Australian corporate owners.
It’s proposed investment in Azumah’s Wa project is to be funded by US natural resources focused institutional investors with more than US$1 billion of funds under management.