West African gold explorer Asara Resources Ltd (ASX:AS1, OTC:GMRMF) has struck a deal with private gold exploration company BIC West Africa Limited (BIC) for the sale of its non-core Kouri and Babonga gold projects in Burkina Faso.
The transaction, valued at US$2.2 million – or around A$3.25 million – includes an upfront non-refundable payment of US$550,000 (A$810,804) already received, a second payment of US$550,000 (A$810,804) due upon SPA execution and a final payment of US$1.1 million (A$1.62 million) upon completion.
Focus on Kada Gold Project
Funds from this sale will be allocated to advance the Kada Gold Project in Guinea and to repay the remaining portion of a convertible note, making Asara debt-free.
Asara will divest 100% of the issued capital in its wholly owned subsidiary, Golden Rim Resources Burkina SARL (GMRB), which holds the licences for the Kouri and Babonga projects.
The projects have been on care and maintenance since FY2022 with no recent exploration activities.
Completion is conditional on receiving necessary authorisations from the Burkina Faso Minister of Mines, no changes in Burkina Faso laws that affect the transaction and requisite amendments to GMRB's articles of association.
BIC West Africa Limited, an Indian-owned, Mauritian-based gold exploration company, focuses on Francophone West African countries, including Burkina Faso, Mali, Guinea and Côte d'Ivoire.
The company has more than 40 years of mining experience in India and a geological team with over 215 years of combined experience. It aims to transition its multiple advanced-stage gold assets in Burkina Faso into producing gold mines within the next two years.
Debt-free moving forward
Asara managing director Tim Strong said: “We are delighted to have reached an agreement with BIC for the sale of the Kouri and Babonga gold projects in Burkina Faso.
“This sale represents a significant milestone for the company and reiterates our commitment to divest our non-core assets to focus on our flagship Kada Gold Project in Guinea.
“The BIC group have been making great progress on their other assets within Burkina Faso and we are confident that they are the right group to take exploration at Kouri and Babonga further for the benefit the local community and government of Burkina Faso. We wish them well with their exploration efforts.
“We will work alongside BIC and the government of Burkina Faso to ensure that the conditions required to proceed with the completion of the sale are met in a timely manner.
“The proceeds of this sale will enable the company to continue exploration and resource definition work, as well as ongoing metallurgical studies at Kada.
“Asara also intends to repay the outstanding convertible note to Capital DI Limited so that the company will be debt-free moving forward."