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Legendary African gold drillers put more faith in Mako, as contractor drills for equity at explorer’s growing Ivoirian gold projects
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Mako Gold has signed deal which will help accelerate drilling at its flagship Napié gold project in Côte d’Ivoire, offering equity to contractor Geodrill in exchange for drilling at its West African gold deposits.
The tie up with noted African discovery-makers Geodrill will see Mako (ASX:MKG) secure up to US$2 million of drilling services while preserving cash.
It will help the junior gold explorer conserve cash with Geodrill able to subscribe for up to US$1m of shares in return for up to US$2m worth of reverse circulation, diamond and aircore drilling with Geodrill.
The agreement is valid for two six month periods, each up to a value of US$1m.
It will help Mako review the breadth, depth and expanse of its large and growing Napié gold project, where an 868,000oz maiden resource across the Tchaga and Gogbala prospects makes up just 4.4km of the 30km long Napié Shear.
It’s worth a reminder that just 13% of this shear has been systematically drilled, with Mako also boasting the 100% owned 296km2 Korhogo project within 30km of Barrick’s 5Moz Tongon gold mine.
The drill-for-equity deal will help recommence drilling rapidly across those sites, enabling the company to follow up exciting recent discoveries like a 23m intersection at 1.01g/t from 53m to the west of Tchaga, outside the current mineral resource.
Mako recently set five auger rigs to the task of drilling 800 drill holes for 8000m to outline multi-kilometer anomalies around Tchaga and Gogbala, with RC and diamond drilling expected to follow on the receipt of results.
Management is pleased
“We are pleased to have secured a drill-for-equity agreement with such a high-calibre drilling company,” Mako Gold managing director Peter Ledwidge said.
“We have a long-standing relationship with Geodrill and have always been impressed with the quality of their work, including their extraordinary ESG initiatives in the communities where they operate.
“Geodrill has been on the MKG share register for some time, and we welcome their further investment in the Company.
“This agreement provides more options for payment of drilling invoices and will assist in the rapid recommencement of drilling on our flagship Napié Project.
“We look forward to strengthening our ongoing relationship with Geodrill, which should be beneficial to all Mako stakeholders.”
History of success
Geodrill has ridden the long West African gold boom since 1998, with 75 drill rigs operating across West Africa, Egypt, Chile and Peru.
The drill-for-equity is a sign of its confidence in Mako’s Côte d’Ivoire gold projects, especially given its existing status as an investor, with Geodrill happy to put more of its skin in the game.
Mako can issue shares up to the value of 50% of its drilling invoices, paying the remainder in cash, allowing it to drill at half the up-front cost of its peers.
“Geodrill is proud to be partnering with Mako Gold on their Napié and Korhogo projects,” Geodrill CEO Dave Harper said.
“We have had a long and successful relationship, having previously drilled on multiple discoveries with the management team in West Africa.
“One of the discoveries went on to become a major producing mine.
“The ‘drill-for-equity’ arrangement allows Mako to drill twice the meterage for the same cash burn, doubling the likelihood of success, while at the same time providing flexibility to revert to cash payment, should Mako elect to.
“We look forward to increasing our shareholding in Mako.”
Mako can, at its discretion, choose to pay 100% of its Geodrill invoices in cash and has no obligation to order a minimum amount of drilling services.
This article was developed in collaboration with Mako Gold, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
