Metminco – Anglo Gold: Joint Venture Agreement

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Metminco

As on 6th December 2018, Metminco Limited (ASX: MNC) has signed a joint venture agreement with Anglo Gold Ashanti Colombia SA, in view of strategic plans of exploring and developing Chuscal gold prospect in Quinchia, Colombia.

Metminco Limited, an exploration & mining company, is involved in exploration of gold and other significant minerals in Colombia, Peru, Chile, and Australia. It aims to enhance growth prospects by partnering with Anglo Gold Ashanti, Colombia based third largest gold mining company in the world.

Presently, the above partnership involves 10% of Metminco and 90% of Anglo Gold, with former being the manager of the JV. MNC aims to expand its stakes to 41% by spending US$2.5 million over the period of 3 years and the parties may involve in pro rata participation or dilution upon it earning 51% interest. The terms also signify one-off right by Anglo to then buyback 21% interest from MNC, making it the manager of the partnership by owning 70% stakes and the rest 30% by Metminco.

The JV looks extremely promising with gold industry gaining momentum in Colombia with several new EIA licences being issued to companies like Anglo Gold. The plans are to rapidly undertake soil geochemical, channel sampling and geophysics and to begin drilling and processing by 2Q 2019.

Company’s primary focus is the Quinchia Gold Portfolio, increasingly becoming more prospective and attractive to investment and is host to numerous large- scale projects with a NI 43-101 estimated mineral resource of 2.8 million ounces of gold. It contains several gold deposits and significant exploration and development targets including Miraflores, Tesorito, Chuscal and Dosquebrados. Miraflores Gold Project plays a crucial role in supporting company’s strategy to transition into a significant gold producer.

Chuscal, a significant gold porphyry target is characterized by huge undrilled gold exploration site possessing significant gold resources in both soil and rock chip geochemistry. The area possesses 0.88-million-ounce gold Miraflores and the 0.92 million-ounce Dosquebrados deposits.

Metminco management eyes huge opportunity with Chuscal JV, with the territory located 1,700m south of the proposed Miraflores plant and 1,100m south of Tesorito, another significant gold target. Channel sampling from a small-scale underground mine indicates continuous and highly encouraging grades beneath the target zone.

Though the Metminco share price has seen a drastic fall of over 90% from $0.011 in the beginning of the year to date, it is currently trading around $0.003 (up 50% on December 06, 2018). However, the stock looks speculatively undervalued with upside potential given the company’s existing exploration projects with hydrothermal alteration seen at Tesorito together along with prolific gold mineralisation already recognised in the Quinchia district and elsewhere in the Cauca belt.

In addition, high future growth signal is provided by Chuscal JV and company’s continued future exploration, growth and expansion plans.


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