10:46:14 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



Roscan Minerals Corp
Symbol ROS
Shares Issued 33,766,075
Close 2016-11-08 C$ 0.025
Market Cap C$ 844,152
Recent Sedar Documents

Roscan, Pelangio enter option, JV for Dormaa project

2016-11-08 17:54 ET - News Release

Also News Release (C-PX) Pelangio Exploration Inc

Mr. Mark McMurdie of Roscan reports

ROSCAN AND PELANGIO TO JOINTLY EXPLORE GHANA GOLD PROJECT

Roscan Minerals Corp. has entered into an option and joint venture agreement dated Nov. 7, 2016, with Pelangio Exploration Inc., pursuant to which the parties established an earn-in arrangement to jointly advance the Dormaa project, a gold exploration project in Ghana, West Africa. Subject to the terms and conditions of the option agreement, Roscan will have the right to earn a 50-per-cent beneficial and equity interest in the Dormaa project by making certain payments to Pelangio and providing financing for the Dormaa project, as described below.

Don Whalen, director of Roscan, stated, "Roscan has been focused on evaluating strategic opportunities, and is now delighted to have concluded an agreement for the right to participate in what we believe to be a prospective and exciting gold exploration project in Ghana." He added, "In addition to the significant exploration potential of the Dormaa project, we believe that, because of the option payment structure, Roscan is in a strong position to raise financing for the project and for its other working capital needs."

About the Dormaa project

The Dormaa project is an early-stage gold exploration project for the exploration of an approximately 86.44-square-kilometre land area located in the Ahafo Ano district of the Ashanti and Brong-Ahafo regions of the Republic of Ghana. Initially, the Dormaa project was established by Pelangio to support the reconnaissance for minerals in the Dormaa project area by Torkornoo and Associates Ltd. (TAL). Early-stage prospecting, geochemical and geophysical surveys were carried out by TAL. Subsequently, TAL entered into an agreement with Pelangio Ahafo (G) Ltd., an indirectly held, wholly owned subsidiary of Pelangio, pursuant to which TAL transferred and assigned to Pelangio Ghana all of its interest and related work obligations in the Dormaa project area, including 100 per cent of the mineral rights granted pursuant to a prospecting licence with respect to the Dormaa project area, which are now held by Pelangio Ghana.

Pelangio has reported that work on the Dormaa project to date has included stream-sediment surveys into the secondary and tertiary drainages in the licensed area, soil sampling using the BLEG technique on an 800-metre-by-100-metre grid, and follow-up, closer-spaced, soil surveys of a 100-metre-by-25-metre grid on the northern half of the Dormaa project area, and that this work resulted in the finding of significant gold-in-soil anomalies. In addition, Pelangio has reported that significant anomalies up to four kilometres long and 500 metres were identified in the southern half of the Dormaa project area and that follow-up, closer-spaced, soil surveys have not yet been conducted in this region. Pelangio has also informed Roscan that recent satellite imagery indicates that substantial unregulated artisanal and mechanized alluvial operations were carried out during 2014-2015 in areas surrounding the Dormaa project, and that gold-in-soil anomalies on the Dormaa project may be the source of the alluvial deposits giving rise to these operations. Roscan has not verified the foregoing historical information about the Dormaa project.

Based on a preliminary work plan approved by the parties for the first year following the effective date, expenditures of approximately $300,000 are planned to be made for expanded gold-in-soil geochemical surveys, prospecting, and approximately 3,000 metres of reverse-circulation and air core or rotary air blast drilling, to be completed by Pelangio Ghana at the Dormaa project.

Option agreement highlights

Some of the key terms of the option agreement are summarized below:

  • To exercise the option and earn a 50-per-cent interest in the Dormaa project, Roscan would:
    • Finance a total of $2-million in exploration expenditures to be incurred by Pelangio Ghana within three years of the date of the option agreement, as follows:
      • $150,000 -- 90 days following the effective date;
      • $150,000 -- 150 days following the effective date;
      • $700,000 -- first anniversary of the effective date;
      • $1-million -- second anniversary of the effective date;
    • Pay to Pelangio an aggregate of $160,000, as follows:
      • $10,000 -- the effective date;
      • $50,000 -- first anniversary of the effective date;
      • $100,000 -- second anniversary of the effective date;
    • Pay the applicable annual ground rent and mineral right fees, which are payable to the government of Ghana pursuant to the prospecting licence, and becoming due during the three-year option period (estimated to be approximately $15,000 (U.S.) in the first year of the option agreement);
  • Pelangio has no requirement to finance the Dormaa project during the option period.
  • Upon the exercise of the option, a joint venture between Roscan and Pelangio would be formed, whereby each party would have an initial 50-per-cent participating interest, and thereafter contribute financing on a pro rata basis (initially, 50 per cent Roscan, 50 per cent Pelangio) or have its participating interest diluted in accordance with a standard dilution formula.
  • Once formed, the joint venture would hold 100 per cent of the mineral rights to the Dormaa project area granted pursuant to the prospecting licence, subject only to a 2-per-cent net smelter return royalty on all ounces of gold recovered from the Dormaa project to be retained by TAL (but subject to the royalty payor's right to buy back 1 per cent of the royalty at any time for $2-million (U.S.)), and a 10-per-cent free carried interest in the rights and obligations of the mineral operations of the Dormaa project reserved to the government of Ghana.
  • The option agreement sets out a detailed process for the further exploration and operation of the Dormaa project, which will be overseen by a management committee consisting of representatives of both of the parties.
  • During the option period and the joint venture, Pelangio Ghana will be the operator of the Dormaa project.

Private placement financing

In addition, Roscan announces its intention to complete a non-brokered private placement of up to 10 million units of the company, at a price of five cents per unit for gross proceeds of up to $500,000. Each unit will consist of one common share and one common share purchase warrant entitling the holder thereof to purchase one additional common share at an exercise price of eight cents for 24 months from the date of issuance. The company reserves the right to accelerate the expiration of the warrants, if at any time, which is more than four months and one day following the closing date of the private placement, the closing price of the company's common shares is 15 cents or more for at least 20 consecutive trading days. The common shares and warrants comprising the units will be subject to resale restriction for four months plus one day from the date of issuance. The company may pay finders' fees with respect to proceeds raised.

The company intends to use the net proceeds from the offering to finance its first-year commitments of the option, for working capital purposes and otherwise in a manner consistent with the accomplishment of the company's business objectives.

Option grant

The company also announces that it has granted options to a director of the company under the company's stock option plan to purchase a total of 150,000 common shares of the company at a price of five cents until Nov. 7, 2021.

Warren Bates, PGeo (APGO No. 0211), is a qualified person as defined by National Instrument 43-101, and has reviewed and approved the technical contents of this press release.

We seek Safe Harbor.

© 2024 Canjex Publishing Ltd. All rights reserved.