Mining firm Hummingbird Resources signed a letter of intention (LOI) to acquire 50% of the Kobada gold project, in Mali, which is managed by African Gold Group (AGG). The closing of the transaction, which comprises an initial investment from AGG, is subjected to a certain number of conditions including the signing of a binding agreement within 45 days.
According to the agreement’s terms, the firm will invest an initial C$3.6 million to acquire an initial stake of 9.9%. She will then have an exclusivity period of 120 days to proceed to due diligence.
During these 120 days, the firm can increase its stake in AGG to 19.2% with an additional investment of C$4.4 million. Subsequent to the definitive feasibility study at Kobada, Hummingbird will have the right to acquire 50% in the project by financing capital expenditures.
By acquiring the Kobada project, the AIM-listed firm aims to increase by 45%, the annual production capacity of its Yanfolila project, to 150,000 ounces. Indeed, it plans to transport the ore extracted from Kobada for processing at its Yanfolila factory.
The Kobada project holds 2.2 million ounces of mineral resources.