Birim Goldfields has concluded a two-part agreement with Newmont Ghana Gold and Newmont USA, subsidiaries of Newmont Mining comprising a joint venture agreement on the 488.3 km2 Banda Ahenkro property on the Sefwi Belt and the waiving of Newmont’s back-in rights on Birim’s Bui Belt properties.
Under the terms of the agreement, Newmont will waive its historical back-in right to projects on Birim’s 13 properties within the boundary of the old Bui Reconnaissance License. In exchange for this waiver, Birim will grant Newmont an initial 49% equity interest in Birim’s Banda Ahenkro Property on the Sefwi Belt. The Government of Ghana retains a 10% free carried interest in all gold mining development projects in Ghana. Consequently, the interests specified in the agreement will apply to the 90% available interest, with the Government of Ghana holding the remaining 10%. Newmont will have the right to earn another 21% (up to 70%) by spending $1,500,000 on exploration over four years, subject to minimum expenditures of $300,000 in Year 1, $350,000 in Year 2, $400,000 in Year 3 and $450,000 in Year 4. Newmont may then elect to earn an additional 10% interest (up to 80%) by completing a feasibility study on the property. The agreement remains subject to the normal statutory and regulatory approvals.
Birim has a dominant position on one of Ghana’s relatively under-explored gold belts, the Bui Belt. This comprises a portfolio of 15 licenses, of which 13 prospecting licenses, Birim says, “were ‘cherry picked’ after systematic regional exploration by Birim from the >7,000 km2 Bui reconnaissance license acquired from Santa Fe Mining in 1998. The terms agreed with Santa Fe at the time included a right (subsequently inherited by Newmont) allowing them a once-off back-in to any project with a completed bankable feasibility study located within the area defined by the boundary of the original reconnaissance license.”
“The transaction makes a lot of strategic sense for Birim,” says Victor King, President and CEO for Birim. “Exploration progress on the Banda Ahenkro property will benefit from Newmont’s broad exploration expertise and their specific experience on the Sefwi Belt, which hosts their multi-million ounce, world-class Ahafo gold mine. Our active involvement with Newmont at Banda Ahenkro also will benefit our efforts on Birim’s other three properties on the Sefwi Belt, namely Nkenkasu, Bia Tano and Techimentia.” King added, “Newmont’s waiver to their inherited back-in right on our Bui properties will widen our options for funding exploration on this extensive land package. I believe that it is pragmatic for Birim to invite selected interested partners to assist in aggressively advancing exploration on some of our Bui licenses at this stage. This will maximize Birim’s current leverage on the belt and optimize the potential for exploration success on all of the properties.”