GMR 0.00% 1.8¢ golden rim resources ltd

News: Golden Rim Resources secures A$12.8M in cash from project sale

  1. Golden Rim Resources (ASX:GMR) is set to receive a significant increase in cash reserves following the sale of its Balogo Project to MNG Gold Burkina Sarl, part of the MNG Group of companies (MNG).

    Balogo has an Inferred Resource of 850,000 tonnes at 6.8g/t gold for 185,000 ounces of gold for a 0.5 g/t cut-off.

    Total consideration will be A$12.8 million in cash, adding to the company's $1.2 million in cash at the end of 2014.

    Based on yesterday's $0.008 closing price, Golden Rim had a market cap. of just circa A$10 million.

    MNG has completed an extensive due diligence investigation on Balogo.

    Golden Rim will now have sufficient cash for ongoing exploration at its Korongou Project in Burkina Faso, or to even consider new opportunities.

    Recently at Korongou, auger drilling successfully identified new zones of bedrock gold mineralisation under shallow cover.

    A significant, new 2.1km x 0.4km auger gold anomaly (Guitorga Line) has been outlined at the Banouassi Prospect.

    The new gold anomalies have a very high gold tenor with results including 7,001 ppb, 2,449 ppb, 1,989 ppb and 1,872 ppb gold.

    Adding to the potential of Korongou, some anomalies remain open along strike.


    The principle terms of the sale are as follows:

    - MNG to pay US$0.5 million (A$0.6 million1) in cash, refundable in the event the conditions precedent are not satisfied or waived. The funds are to be held in escrow until the conditions precedent are satisfied.

    - Upon satisfaction or waiver of the conditions precedent, including the transfer of the Balogo exploration permits to MNG, Golden Rim to receive a further US$4.5 million (A$5.8 million) in cash. The parties will push for the transfer to be completed as soon as possible.

    - A further US$2 million (A$2.6 million) is payable upon the earlier of the granting of an exploitation permit for mining; or within 24 months of the conditions precedent being satisfied or waived. In the event the payment is not made within 24 months (except in the event of force majeure), MNG shall transfer 49% of its interest in Balogo back to Golden Rim.

    - Upon commercial production at Balogo, Golden Rim will receive an additional US$3 million (A$3.8 million) in cash.

    - Golden Rim will also receive a net smelter return (NSR) of 1% on gold production at Balogo. MNG has the right to purchase the NSR from Golden Rim for a further US$5 million (A$6.4 million) in cash.

     

 
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