THE BOURSE WHISPERER: Middle Island Resources (ASX: MDI) has executed a Heads of Agreement relating to divesting the company’s 100 per cent-interest in the Reo gold project in West Africa to Tajiri Resources Corp. (TSX-V: TAJ) via an Option to Purchase Agreement.
Middle Island Resources declared summary commercial terms involve aggregate cash payments to Middle Island of US$335,000 and the issue of 5 million shares, representing eight per cent of Tajiri’s then post-issue expanded capital, plus a two per cent net smelter return (NSR) royalty, which can be purchased by Tajiri for US$5 million.
On completion, the Reo project transaction Middle Island will have divested all of its remaining gold interests in West Africa, allowing the company to fully focus on its advanced Sandstone gold project development in Western Australia.
“The transaction structure allows Middle Island shareholders to retain a significant indirect interest in the upside potential of the Reo project via the Tajiri equity and royalty components,” Middle Island Resources managing director Rick Yeates said in the company’s announcement to the Australian Securities Exchange.
“Middle Island looks forward to working closely with Tajiri to facilitate remaining aspects of the due diligence and documentation, in order to complete the transaction and progress the Reo project towards feasibility.
“Middle Island will keep shareholders updated on progress with the Reo project transaction during 2018.”