The parties have entered in a binding term sheet for the sale, which is subject to certain conditions.
As well as the US$700,000 consideration, Mako will retain a 1% Net Smelter Royalty if Nordgold discovers an NI 43-101 compliant resource of at least 2 million ounces gold and advances the resource to production.
Nordgold has the right to repurchase the NSR at any time for US$4.5 million which is the current equivalent of approximately A$6.89 million.
"World-class global producer"
Mako's managing director Peter Ledwidge said: “We are happy to have attracted the attention of Nordgold, a world-class global gold producer, by our exploration success in Burkina Faso.
“We are confident that Nordgold has the capability to quickly advance the Niou Project - the potential success in outlining a 2 million ounce resource would be beneficial for both Nordgold and Mako.
“We are happy to have retained some upside to Nordgold’s potential success through our 1% NSR and look forward to applying the funds from this transaction to advance our flagship Napié Project in Côte d’lvoire.
“We wish Nordgold all the best in their exploration.”
Key terms of the binding term sheet and proposed sale agreement are:
- The proposed Sale Agreement is conditional on the transfer to Mako Gold SARL being approved by the Cadastre Minier and Minister of Mines of Burkina Faso - after Mako Gold SARL receives the decree for the Niou Permit, the company will initiate the transfer of the Niou Permit to Nordgold’s Burkina subsidiary, Jilbey Burkina SARL.
- Mako is to transfer Niou Sud permit to Jilbey as soon as the Niou Sud Permit is decreed to Mako Gold SARL - however, the payment is not conditional upon the transfer of the Niou Sud Permit to Nordgold.
- The proposed Sale Agreement will become definitive and binding in Burkina Faso when the signed English version of the agreement has been translated into French and signed, as the French version will be the legally binding version of the agreement in Burkina Faso (French being the official language of Burkina Faso).
- The French version of the agreement must also be approved by the Burkina Faso Ministry of Mines - Nordgold and Jilbey are to use reasonable endeavours to ensure the speedy transfer of the Niou and Niou Sud permits to Jilbey from the Burkina Faso Ministry of Mines.
- Payment of the purchase price by Nordgold to Mako will occur on the deferred payment date (defined in the proposed sale agreement to be the earlier of the business day – 90 days following the date on which Mako lodges the transfer)
- If on the expiration of 90 days from the lodgement date the transfer is not registered by the Cadastre Minier, either party may terminate the proposed sale agreement.