FFX 0.00% 20.0¢ firefinch limited

BGS The Fundamentals, page-11

  1. 3,448 Posts.
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    I found that previous article I posted very interesting, the reason why is because they have diverged from their standard JV which looks like below;

    "The Incumbent" entered into a joint venture agreement with Randgold, a wholly owned subsidiary of FTSE 100-quoted Randgold Resources Limited, in relation to the exploration, evaluation and, potentially, the development and mining of the ????? project in ????? (the "Joint Venture"). Randgold will hold 51% of the Joint Venture and "The Incumbent" 49% and a committee comprising three representatives from Randgold and two from "The Incumbent" will manage the project.
    Under the terms of the Joint Venture, Randgold has agreed to undertake exploration over the ????? permit and fund all work up to and including the completion of a pre-feasibility study ("PFS") on the project. The committed work includes the execution of at least 10,000 metres of reverse circulation (or equivalent) drilling per annum up to the completion of a PFS which indicates that mining of at least 1Moz of gold is economically feasible.
    Subject to the PFS satisfying this condition, "The Incumbent" will have the option to maintain its 49% interest through funding its share of the costs of a feasibility study (the "FS"). In the event that"The Incumbent" elects not to fund its share of the FS, its interest in the Joint Venture would reduce to 35%. If, following completion of the FS, the decision is taken to develop a mine, "The Incumbent" will have the right to retain its interest through funding its share of the costs else "The Incumbents" share is reduced to 10%.

    Now "Fleurette Group’s Moku-Beverendi project" is a lot more advanced than many of the other companies Randgold does JV's with and it appears they have after multiple offers had to come up with a cash payment and funding of the feasibility to get a deal done.

    So BGS is also at a much more advanced stage than the normal JV targets, possibly close to where "Moku-Beverendi project" is up too. Once you do one deal of this nature then the second is much easier to commit too : )
 
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