Under the terms of the proposed sale agreement, Mako will sell the permits, receiving US$700,000 (around A$1.1 million) upfront cash consideration.
In addition, Mako will retain a 1% Net Smelter Royalty (NSR) if Nordgold discovers an NI 43-101 compliant resource of at least 2 million ounces of gold and advances the resource to production.
Nordgold has the right to repurchase the NSR at any time for US$4.5 million (A$6.8 million).
Niou permit and Niou Sud permit application in Burkina Faso.
Funding exploration efforts
Divesting the Niou project in central Burkina Faso allows Mako to focus on exploration and capital on its flagship Napié project in Côte d’Ivoire.
Mako managing director Peter Ledwidge said: “The signing of the sale agreement is a step towards reaping the financial benefits of the sale and our commitment to focus our exploration efforts on our flagship Napié project in Cote d’Ivoire.
“The proceeds from the sale, in addition to the proceeds of our recent placement will significantly strengthen our cash balance and will finance drilling activities so that Mako can deliver a maiden resource, while also advancing other prospects on the Napié project.
“We look forward to resuming our drilling activities at Napié shortly.”
The non-dilutive funding received from the sale, in conjunction with proceeds from the recent capital raising (A$3.25 million), positions Mako with a strong cash balance of around $4.8 million.