UK-based miner Cradle Arc and Australian resources company Indiana Resources have agreed to create a joint venture (JV) for the Kossanto West Gold Project in Mali through their respective subsidiaries Caracal Gold Mali and Mukuyu Resources (Mali).
The joint venture will cover the exploration and development of the 137km2 gold prospect located in the western part of the African country. The Kossanto West Gold Project is made up of the Kobokoto Est and Koussikoto exploration permits and is located near the Koussikoto Ouest Gold Project owned by Indiana Resources.
Upon creation of the joint venture, Cradle Arc will keep a 35% stake in the permits of the Kossanto West Gold Project with Indiana Resources to hold the remaining 65% stake.
As per the terms of the JV, Indiana Resources will carry out all exploration work over the permits and funding all costs up to and including the completion of a pre-feasibility study (PFS) on the Kossanto West Gold Project. After the PFS is completed, all the subsequent expenses will be split between the partners according to their participating interests.
Indiana Resources CEO Chris van Wijk said: “Indiana is pleased to have concluded the JV with Cradle Arc as it provides a low-cost option that is non-dilutive to Indiana shareholders and involves no cash payment, with all expenditure to be committed to exploration. It is consistent with the Company’s stated strategy to increase our interests in Mali and allows Indiana to methodically continue its exploration in the area.
“Our review of the area has indicated that there is strong potential for the results recently returned from Koussikoto to extend further north into the Kossanto West tenement and we are keen to commence activities on the ground next month.”
Caracal Gold Mali will continue to own the permits till the joint venture partners establish a new company for the future development of the Kossanto West Gold mine. Once the company is formed, the joint venture will own 90% in the permits with the remaining 10% to be held by the Malian government.
Cradle Arc CEO Kevin van Wouw said: “This agreement enables Cradle Arc to advance its highly prospective West African gold assets, whilst maintaining its primary strategic focus on the development of the Mowana Copper Mine.
“The terms of the JV do not require Cradle Arc to fund exploration activities up to the PFS stage, such that accordingly there will be minimal impact on the Company’s balance sheet as we continue to focus on our core asset in Botswana.”
Recently, Cradle Arc gained 100% ownership of the Kossanto West Gold Project following the exit of Randgold Resources (Mali) Sarl from the joint venture for the Malian gold mine which was announced in February 2016.