Apollo Consolidated has cemented its status as one of the most well-funded explorers on the ASX after clinching a $20 million deal to offload a royalty attached to the Seguela gold project in Cote d’Ivoire. 

Apollo (ASX: AOP), whose main concern is the million-ounce-plus Lake Rebecca gold project east of Kalgoorlie in Western Australia, announced on Thursday it had entered a binding agreement to sell the 1.2% net smelter return royalty to New York Stock Exchange-listed Gold Royalty Corp (GRC).

Seguela owner, Toronto-listed goldminer Roxgold, has 14 days in which it can elect to match the terms agreed between Apollo and GRC and buy back the royalty itself.

Regardless of the Roxgold decision, Apollo’s coffers – the company held $18.6 million in cash at the end of December – are set to swell once more.

“Apollo sees the sale of the Seguela royalty as an excellent result, bringing to book what was an under-recognised overseas asset and allowing us a significant financial runway to progress Lake Rebecca,” managing director Nick Castleden said.

“Realised funds, less any tax and transaction costs, will add to our existing cash balance, placing the Company in a very strong position to take Rebecca forward.”

Apollo’s cash balance has been in a better than healthy state since late February last year when it completed a $10 million capital raising.

It was bolstered again in June when Exore Resources exercised its pre-emptive right to buy the 20% of the Liberty and Bagoe gold projects in Cote d’Ivoire it didn’t already own from Apollo for US$4.5 million.

Apollo had previously reached a deal with private equity firm Ibaera Capital on the Liberty and Bagoe interests that was conditional on Exore forgoing its pre-emptive right.

Out of Africa

Cote d’Ivoire had been Apollo’s main focus until mid-2017 when diamond drilling at Rebecca returned a string of high grade results from a new gold lode.

The subsequent drill-out culminated in the announcement of a maiden resource of 27 million tonnes at 1.2 g/t Au for 1.035 million ounces in February last year.

More than half of those ounces were in the indicated category.

Further drilling was carried out over the course of last year to increase confidence in the resource and follow up potential extensions to known mineralisation.

Apollo has indicated it will update the resource estimate in the June quarter.

The results will guide the company’s 2021 program in respect to analysis of commercial development options and prioritising further resource definition and exploration drilling.

At the start of February, Apollo acquired an additional 1.35km2 of ground adjoining the north-eastern corner of the Lake Rebecca tenements where the Rebecca deposit is situated.

The acquisition was deemed as important in allowing operational flexibility with respect to future pit design, access and hydrology.

 

 

This story was developed in collaboration with Apollo Consolidated, a Stockhead advertiser at the time of publishing.

This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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