AshantiGold Corp (CSE:AGZ) (OTCMKTS:GULSF) said it is proceeding with development of its mineral property interests in Western Africa and this has led to higher expenditures for the company.
In a regulatory filing, it said Kossanto East Ashanti has a partnership with Cradle Arc PLC to develop Kossanto East. This is a 66.41 square kilometer concession located within the West Mali Gold Belt which extends approximately 180 kilometers in a north-south direction along the Mali-Senegal border.
Ashanti negotiated the right to earn 65% of Cradle Arc’s interest in Kossanto on August 22, 2016. On August 3, 2017, the company signed a revised agreement where it could buy 100% of Kossanto for a purchase price of $1 million.
The government of Mali has a carried 10% interest in all minerals and mining concessions in Mali, thus the100% in the project will be a net interest of 90%.
Overall, the company’s expenditures increased significantly in the fourth quarter of 2018 and fiscal 2018 as it expanded field operations at Kossanto.
Fiscal 2018 was the first full year of operations at the Kossanto East Project in western Mali.
Exploration costs of $1,442,940 in that quarter was because of exploration activities in Africa, specifically the Kossanto project, Ashanti said.
Deal with Goldplat
Anumso Ashanti has a partnership with Goldplat PLC to develop the Anumso project. Anumso is a 29.63 square kilometer mining lease in the northern portion of the Ashanti Gold Belt, a geological formation in Ghana that hosts many gold deposits.
Ashanti has the right to earn 75% of Goldplat’s interest in the project by expending $3 million on exploration over the next two-and-a-half years.
The company expects that the initial 51% interest has been earned through the expenditure of $1.5 million in the 18 months ending in October 2018.
An additional 24% interest can be earned through expenditure of an additional US$1.5 million in the following 12 months or pay the deficiency to Goldplat.
Ashanti has until December 30, 2018, to decide if it will choose to earn-in an additional 24% or form a joint venture with Goldplat.
Goldplat is conducting a review of Ashanti’s work on the license as a formal part of the earn-in agreement. The government of Ghana has a carried 10% interest in all minerals and mining concessions in Ghana, thus the 75% interest in Goldplat’s 90% interest will reflect a 67.5% net interest for Ashanti.
Ashanti will be the operator of the exploration and development program during the option period.
Upon completion of its earn-in rights, Ashanti and Goldplat will form a joint venture whereby each party will contribute proportionally to the project’s development, or have its interest diluted.
Red Back Mining Ghana agreement
The company is also party to an option agreement with Red Back Mining Ghana Limited, an indirect, wholly owned subsidiary of Kinross Gold Corp (CSE:K) (NYSE:KGC) to earn an interest in three prospecting licenses located in the Ashanti Belt in central Ghana.
The agreement provides Ashanti with the right to earn 100% of Red Back’s interest in the project by expending US$1 million on exploration over two years, but no less than US$500,000 in the first year after the transfer of the license.
Ashanti is the operator of exploration and development programs on the project during the term of the agreement. Upon completion of its earn-in rights, Ashanti will have acquired 100% of Red Back’s interest in the project, subject to Red Back retaining a 2% net smelter royalty.
The project consists of three licenses: Kwahu Oda, Asankare, and New Abirem. The project covers a total area of approximately 68 square kilometers in the prolific Ashanti Belt of Ghana.
Earnings in focus
Ashanti recorded a net loss in its fiscal fourth quarter of $1.7 million during the three months ended August 31, 2018, compared with a net loss of $1.4 million during the three months ended August 31, 2017.
The company recorded a net loss of $4.6 million for the year ended August 31, 2018, versus a net loss of $2.8 million in the year ended August 31, 2017.
The increase of $271,792 in net loss during the fourth quarter of 2018 was because of increased exploration costs, which were offset by decreases in stock-based compensation, consulting fees, write off of the reclamation deposit and foreign exchange.
Contact Rene Pastor by [email protected]