AIM-listed gold exploration company GoldStone Resources has revealed that the company has entered into a joint venture agreement with Randgold Resources Senegal, a wholly-owned subsidiary of Randgold Resources, over the Sangola gold project in Senegal.The joint venture will promote the exploration, evaluation and, potentially, the development and mining of the Sangola project in Senegal. GoldStone has noted that Randgold will hold 51% of the Joint Venture and GoldStone 49% and a committee comprising three representatives from Randgold and two from GoldStone will manage the project. “We are delighted to have entered into this joint venture with our neighbour Randgold, who have an exceptional track record of finding and developing gold projects in West Africa. We are retaining a material interest in the project whilst removing any funding requirement until the project has advanced significantly. We are looking forward to moving ahead at Sangola with our new partners,” said GoldStones CEO Jurie Wessels. The 471 km Sangola permit lies in the south-eastern corner of Senegal in a prolific gold province where more than 30 Moz of gold have been discovered in the past 10 years. The Sangola permit area is bisected by a major gold bearing shear zone known as the main transcurrent shear zone. This shear zone is host to Randgold’s 3 Moz Massawa deposit, which lies 30 km towards the north-east of the licence area.
Under the terms of the Joint Venture, Randgold has agreed to undertake exploration over the Sangola 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 m of reverse circulation drilling per annum, up to the completion of a PFS which indicates that mining of at least 1Moz of gold is economically feasible.Further, subject to the PFS satisfying this condition, GoldStone will have the option to maintain its 49% interest through funding its share of the costs of a feasibility study (FS). In the event that GoldStone 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, GoldStone will have the right to retain its interest through funding its share of the costs. However, GoldStone has noted that should the PFS indicate that the mining of at least 1Moz of gold will not be economically and commercially feasible, the joint venture will cease to have effect. In addition, Randgold may terminate the joint venture at any time by giving GoldStone 90 days’ notice.