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On 8 February 2019, Indiana Resources Limited (ASX: IDA) announced that is has signed a non-binding agreement for a joint venture with Altus Strategies for exploration licenses in the Mali Gold belt, which is strategically located to the Companyâs existing Mali exploration project.
Under this agreement Indiana is expected to earn up to an 85% interest via Legend Mali Inc (wholly owned subsidiary of Altus) in the Tabakarole and Lakanfla gold projects which are located 6 km south-east of the Sadiola gold mine (approx. 13 mn oz) in the prolifically gold mineralised Kenieba Province of western Mali. These projects comprise 124 km square of tenements and potentially enhance the Companyâs tenement interests to over 387 km square. This agreement is subject to due diligence, and a 60-day exclusivity period.
Company proposes to raise A$0.6 mn via share placement to high net worth investors. Â The issue of Indiana shares proposed will be subject to requirement of shareholder approval under the arrangement.Â
A per the agreement, Joint Venture will be executed in various stages. In stage 1, Indiana will be undertaking 3,000 meters of drilling at the Lakanfla project and by completing an exploration programme at the Tabakarole project, it will earn an initial 25% interest in the projects, within 12 months of entering the Agreement. Altus will obtain US$100,000 worth of Indiana shares on the commencement of Stage 1; the calculation will be based on the reference to the lower of the 60-day Volume Weighted Average Price of Indiana shares on the ASX on the date of signing the Term Sheet.
In stage 2, Indiana will have the right to increase its interest to 51% in the project by undertaking 9,000 meters of drilling at the Lakanfla project and 2,500 meters of drilling at the Tabakarole project, within 18 months of entering to Stage 2. Altus will obtain US$200,000 worth of Indiana shares and US$100,000 in cash on the commencement of Stage 2, based on the agreed formulae.
In Stage 3, Indiana will have the right to increase stake to 70% after completing definitive feasibility study upon which Altus will obtain US$200,000 worth of Indiana shares and US$100,000 in cash on the start of Stage 3, based on agreed formulae. I
n Stage 4, Altus will have the option to either co-finance or let Indiana solely finance in the project to increase its stake to 85% by commencing gold production on either of the Projects within 24 months of entering into Stage 4. Altus will obtain US$750,000 worth of Indiana shares and US$500,000 in cash based on the agreed formulae.
In case of withdrawal from the JV at any stage, Indiana will receive 0.75% NSR royalty from the project on future gold production. NSR will be fixed at the investment in the Joint Venture made by Indiana at the point of withdrawal and can be repurchased by Altus at a 10% premium.
Indiana proposes to raise A$0.6 mn by placing up to 12,000,000 shares at A$0.05 per share to sophisticated investors, including existing supportive shareholders. The placement is scheduled for completion on 18th February 2019 (Monday) under the Companyâs ASX Listing Rule 7.1 capacity.
Altus is a Toronto (TSX-V: ALTS) and London (AIM: ALS) listed entity, with most of its focus on exploration project generation in Africa.
IDA was placed on trading halt on 29th January 2019, till 31st January 2019, when the company announced suspension from official quotation pending the release of JV announcement. This further got extended on 5 February 2019. The stock resumed trading post the JV announcement.
Indiana Resource Limited last traded at A$ 0.055 on 11 February 2019. Its absolute return over 3 months, 1 year, and 5 years are -5.17%, -8.75%, and 747.16% respectively.
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