Minnow Alicanto Minerals (ASX:AQI) has plugged away at its Arakaka project in Guyana, South America, since 2013.
It’s a promising project that has never really delivered the goods.
The 300sqkm area produced more than 1 million ounces of alluvial and near surface gold over a century of mining, Alicanto says.
- Scroll down for more ASX gold news >>>
More recently, a number of players have spent many millions on exploring big target areas prospective for shallow, bulk tonnage, open pit gold mines. Yet Arakaka remains in an early stage of exploration and development.
Previously held by companies including gold major Newmont, more than $58m had been spent on exploration by the time Alicanto acquired the project in 2013 for about $780,000.
In March 2016, a lucrative earn in deal was signed with gold major Barrick over the project, sending Alicanto on a tear. The stock peaked briefly at about 37c per share.
Barrick could’ve earnt 65 per cent of Arakaka by spending $11.6m on exploration over four years plus an extra $2.9m in cash payments to Alicanto.
But Barrick chose to withdraw from the project in June 2018, after spending $10.3m in regional reconnaissance programs, leaving Alicanto with 100 per cent ownership.
The stock plummeted, and never really recovered.
- Subscribe to our daily newsletter
- Join our small cap Facebook group
- Follow us on Facebook or Twitter
But now there may a sale on the cards, as Alicanto pivots away from gold and toward base metals exploration in Sweden.
Today, the explorer announced an exploration and potential purchase deal with gold major Nordgold worth $11.6m.
Nordgold is big league. In 2018, it produced 907,000oz for revenues of $1.7 billion from 10 mines around the world.
Nordgold can acquire Arakaka by sole funding $4.3m in exploration expenditure over the next year. After this, it can give Alicanto an extra $7.3m to finalise the acquisition.
And Nordgold can only withdraw from the earn-in after contributing a minimum of $2.2m.
Alicanto chief executive Peter George says the company is pleased with the Nordgold deal – but it’s also keen to kick off exploration at its newly acquired Swedish base metals projects.
“We are very excited to be starting a new chapter for the company as we look to commence exploration for high-grade VMS style deposits in Sweden,” he says.
“We expect our maiden exploration program, including maiden drilling, to commence in early Q3 this year.”
In other small cap gold news:
Here’s a couple of significant drilling programs for investors to keep an eye on.
Indiana Resources (ASX:IDA) has finished a drilling campaign at the southern end of its West Mali gold project. A range of early stage targets were drilled. Indiana also sunk a hole into the Edge prospect to follow up on historic high-grade gold hits like 4.5m at 18.55g/t gold. Results are expected within four weeks.
And First Au (ASX:FAU) has kicked off follow-up drilling near the 68,731oz Gimlet gold deposit, just 15km from Kalgoorlie. The priority target is a “major structure” north of Gimlet, the company says.