Asante Gold partners Chinese company to develop Kubi project

ahmedAsante Gold Corporation says it has entered into an agreement with BXC Company (Ghana) Limited to form the Kubi Gold joint venture to develop the Kubi Mining Leases in Ghana towards production.

BXC, a wholly owned subsidiary of Beijing Fuxing Xiao-Cheng Electronic Technology Stock Company Limited, has agreed to provide C$19.5 million (approximately US$14.82 million) in funding to earn 50 per cent of the Kubi Gold joint venture and a 30 per cent equity interest in Asante.

According to a statement issued by Asante Gold, BXC will participate in a private placement by purchasing 16,468,400 or such other number of common shares necessary to give BXC a 30 per cent equity interest in the then issued capital of the company, at a price of C$0.20 (approximately US$0.152) per share, subject to the approval of the Canadian Securities Exchange.

“Asante will apply 10 per cent of the proceeds of the private placement to its unallocated working capital, and the balance to complete its initial funding of the Kubi Gold joint venture. The agreement is subject to final due diligence and closing is expected by December 31, 2016,” the statement said.

Asante Gold said BXC has also committed to provide additional funding to the Kubi Gold joint venture on reasonable commercial terms, for the construction of additional facilities such as a production shaft, full processing facilities or expansion.

According to the agreement, BXC has the right to maintain a 30 per cent equity interest in new equity financings announced by Asante, and up to two seats on the Board of Directors of the company.

“The agreement is subject to all requisite governmental and regulatory approvals, including disinterested shareholder approval and closing of the Kubi acquisition from Goknet Mining Company Limited such approvals expected at the Asante AGM to be held in Vancouver on December 28, 2016, and if required, the consent of the Minister of Lands and Natural Resources of Ghana; and any shareholder, regulatory and stock exchange approvals required by BFXC,” the statement said.

Asante has agreed to pay from its share of the joint venture revenue the two underlying Kubi royalties: the Goknet one per cent net smelter returns royalty; and the Royal Gold, Inc. three per cent net proceeds of production royalty. New mining leases in Ghana also carry on behalf of the Ghana government a five per centNSR and a 10 per cent interest in any dividends paid out by the operating company.

“As a result of this agreement, the company has suspended the previously announced $0.18 unit private placement offering. Subscriptions that were received and accepted up to October 3, 2016 will be completed, totalling 2,125,311 units for gross proceeds of $382,556. No insiders or directors of Asante, or principals or associates of BXC are participating in the placement. Finders fees of $15,000 and 41,667 warrants are payable,” Asante Gold said.

Commenting, Douglas R. MacQuarrie, president and CEO of Asante Gold Corporation stated, “We are extremely pleased to welcome BXC as our JV partner and major shareholder to move Kubi forward to production. Their successful operating history in Ghana and strong balance sheet will complement our strengths in gold exploration, discovery and development. Their commitment to secure future debt funding for the joint venture gives Asante a non-dilutive path forward to fully develop the potential of Kubi.”

On his part, Yi Cheng, Group Chairman of BXC and president of BFXC, stated, “Our financial and operating strength complements Asante’s proven exploration and development expertise. We are committed to assisting Ghana to provide electricity at competitive rates – which will enhance our growing investments in the gold mining sector.”

Asante Gold Corporation is a Vancouver based gold company, developing Kubi as a potential near term underground mine; and exploring the Betenase, Fahiakoba, Keyhole and Ashanti II concessions all adjoining or on strike with major gold mines near the centre of Ghana’s Golden Triangle.

Ghana is Africa’s second-largest gold producer and the 10th largest gold producer in the world with an output of 90 metric tons in 2014.

The country has mining-friendly regulations and features two mining colleges and a large workforce trained in geology, exploration methods and mining engineering.

 

By Times Reporter

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