Former oil and gas explorer Emerald Resources has confirmed plans to transition to the gold sector, announcing today a joint venture deal to earn-in to Renaissance Minerals’ Cambodian gold project.
Former oil and gas explorer Emerald Resources has confirmed plans to transition to the gold sector, announcing today a joint venture deal to earn-in to Renaissance Minerals’ Cambodian gold project.
Emerald has entered into a memorandum of understanding with local company Renaissance to earn up to a 51 per cent stake in the Cambodian project, with Emerald to sole fund a definitive feasibility study on the development of the Okvau deposit, an environmental assessment and a $US3 million exploration program.
Renaissance and Emerald will be joint managers of the exploration program until Emerald has earned its 51 per cent stake.
Emerald has also acquired a 10 per cent stake in Renaissance by subscribing for half of a $3.4 million capital raising, which was priced at 3 cents per share.
As a result, Emerald has the right to appoint a non-executive director to the Renaissance board.
The other half of the capital raising was put forward to institutional and sophisticated investors.
Emerald managing director Morgan Hart, who joined the company from Regis Resources 18 months ago, said Emerald had evaluated a number of strategic global resource opportunities and the Okvau gold deposit had potential to add significant value to the business.
“We will focus on the development economics of the Okvau deposit by optimisation of capital and operating costs through process design and mining efficiencies as we have been able to deliver on gold projects in the past,” he said.
“The work completed by Renaissance to advance the project to its current status has been of an excellent standard, allowing Emerald to concentrate on updating the existing pre-feasibility study in the short to medium term prior to completing the definitive feasibility study.
“The updated PFS is expected to give Emerald and Renaissance shareholders a clearer picture of the likely development path and timeline for the Okvau project’s development.”
As Emerald has previously been focused in the US oil and gas sector, the deal with Renaissance will result in a change in the nature and scale of the business, meaning it will be required to obtain shareholder approval at a general meeting in March, issue a prospectus for a capital raising and re-comply with ASX listing rules.
Renaissance managing director Justin Tremain said the company was committed to taking the Okvau project forward.
“In light of current equity market conditions, Renaissance believes this joint venture provides the most attractive funding option for our shareholders,” he said.
Renaissance shareholders retain significant ownership of the Okvau project with an exceptional development partner, and will benefit from any improvement in development economics and from future exploration success without the associated immediate funding obligation.”
Emerald shares will remain suspended from trade until it has re-complied with ASX rules.
After an early drop, Renaissance shares were 3 per cent higher to 3.4 cents each at midday.
