Photo credit: Kainantu Resources
Kainantu Resources Ltd, the Asia-Pacific focused gold mining company provides an update on completion steps to acquire control of the May River Project in the world-renowned copper-gold district of Frieda River, Papua New Guinea (“PNG”).
Background
In a press release dated June 15, 2021 (“June Release”), KRL announced the execution of two definitive agreements to acquire control of the May River Project (“Project”) through the acquisition of two unrelated holding companies: Hardrock Limited (“Hardrock”) and Niuminco Group Limited (“Niuminco”). On closing of the definitive agreements, KRL would consolidate three adjoining tenements, as detailed in Figure 1.
All tenements are highly prospective for copper and gold and are located in close proximity to the world-renowned Frieda River Copper-Gold Project, with the district known for both porphyry and high-sulphidation epithermal styles of mineralisation trending along the Fiak Fault.
In relation to EL2603 (being the tenement subject to a definitive agreement with Hardrock), the key prospects of Skiraisa, Foya, Eserebe and Mountain Gate are situated along a 7 km long N-NW trending structural corridor; exhibiting many attributes similar to the extended mineralised system identified at the Frieda River Copper-Gold Project (located 10 km to 15 km to the east).
Update on closing of the Acquisitions
The following provides an update on progress toward closing of the definitive agreements, with reference to the June Release for further particulars on the commercial terms agreed separately with Hardrock and Niuminco.
Definitive Agreement with Hardrock
As agreed under the definitive option agreement between KRL, Hardrock and its shareholders, KRL has an option to acquire Hardrock by way of a series of option arrangements.
As an initial step, KRL agreed, at its expense, to complete a field study and sampling programme at May River (“Study”) to increase confidence and understanding of the Project. On completion of the Study, KRL has a right to exercise a first option to acquire a 10% equity interest in Hardrock (for no further consideration beyond the “in-kind” expenditure incurred to complete the Study).
In collaboration with Hardrock, KRL reports positive progress towards completion of the Study and is encouraged by initial trends that have emerged. KRL expects to finalise the Study within the coming weeks and will provide a further update in the near future.
Definitive Agreement with Niuminco
As detailed in the June Release, KRL entered into a definitive agreement with Niuminco and its related entities (“Niuminco Agreement”) to indirectly acquire EL2527 and historic data in respect of the Project.
Under the Niuminco Agreement, a key condition precedent to closing remains confirmation to KRL’s satisfaction as to the “good standing” of EL2527 (with Niuminco responsible for maintaining the currency of such tenement). In this regard, Niuminco has advised KRL that the PNG Minister for Mining has not consented to Niuminco’s request for an extension of EL2527. Niuminco further advises that it has commenced steps to review this decision; and that EL2527 remains on foot pending a further determination.
The Niuminco Agreement has a sunset date of October 31, 2021 (or such further date as KRL may agree at its absolute discretion) for closing and satisfaction of conditions precedent (with Niuminco advising that it expects a resolution prior to this time on securing an extension of EL2527). KRL will continue to monitor any developments and provide a further update in due course.
Qualified Person
The scientific and technical information disclosed in this release has been reviewed and approved by Graeme Fleming, B. App. Sc., MAIG, an independent “qualified person” as defined under National Instrument 43-101, Standards of Disclosure for Mineral Projects.
About KRL
KRL is an Asia-Pacific focused gold mining company with two highly prospective gold projects, KRL South and KRL North, in a premier mining region, the high-grade Kainantu Gold District of PNG. Both of KRL’s projects show potential to host high-grade epithermal and porphyry mineralisation, as seen elsewhere in the district. KRL has a highly experienced board and management team with a proven track record of working together in the region; and an established in-country partner.
Article courtesy of Kainantu Resources
