Aurum buy-in to extend 1.6M-ounce Cote d'Ivoire gold project

Aurum Resources has added two new contiguous permit applications to the southern part of the company’s extensive tenement holdings, which make up its 1.6-million-ounce Boundiali gold project in Côte d'Ivoire. 

The strategic acquisition, comprising 316 square kilometres, extends the overall width of the company’s current southern grounds to about 52km and should help Aurum expand the project’s current mineral resource.

The new permit areas span major north-south structural trends directly associated with the area’s significant gold mineralisation and their related secondary structures.

Aurum’s in-country subsidiary Plusor Global inked the agreement with Encore Resources Côte d'Ivoire SARL (Encore) to earn up to 80 per cent of each of the Encore joint venture permit applications, which the company submitted in October 2023.

Aurum’s share price saw an emphatic 2-cent jump to $0.51c on the news, creeping to within 2c of the company’s best-ever price.

Aurum Resources managing director Dr Caigen Wang said: "This Encore JV is a highly strategic acquisition, significantly enhancing our position in the Boundiali gold belt with an additional 316 square kilometres of ground that is adjacent to existing tenements where we have already defined mineral resources. The terms allow for a focused and staged investment, aligning our expenditure with exploration success. The equity incentives ensure strong alignment with Encore Resources.” 

The joint venture’s key terms include Aurum granting Encore a total of 4 million Aurum options upon agreement execution, with an exercise price set at 110 per cent of the five-day volume-weighted average price of Aurum shares. 

When each permit application is granted, Plusor will earn a 30 per cent interest in the relevant licence by issuing 2M Aurum shares to Encore. This equates to a total 4M Aurum shares, if both licences are granted.  

The agreement also encompasses resource-based milestones. For each permit area, Aurum will issue Encore 1M shares when Aurum defines a JORC-compliant inferred, indicated or measured resource of 250,000 ounces gold. 

And the deal sets out further staged issues of 1M Aurum shares for each additional 250,000 ounces of gold defined, up to a maximum of 4M Aurum shares per permit area. 

This consideration equates to a maximum 1M ounces gold per permit area and a potential transfer of a total 8M Aurum shares, if both permit areas achieve their milestones.

Aurum has designated the two new JV application areas BE/W and BE/E. 

The BE/W area fills a strategic gap by enclosing important structures and their gold mineralised trends, which Aurum identified while exploring its contiguous BD and BST grounds. 

The BD area hosts seven priority targets, including BDT1 and BDT2, which host significant mineral resources developed by the company’s recent drilling programs as at the end of December.

BDT1 hosts an impressive estimated inferred mineral resource of 11.9 million tonnes (Mt) averaging 0.9 grams per tonne (g/t) gold for a total contained 340,000 ounces gold. 

The BDT2 target, about 3.5km north of BDT1, has an estimated 16.3Mt inferred mineral resource averaging 0.8g/t gold for a further contained 440,000 ounces gold.

Both resources are likely to be upgraded in new modelling slated for mid-year. 

Notably, the BD ground is peppered with extensive gold anomalism that run better than 100 parts per billion gold in early soil sampling.

The overall anomalism highlights many gold signatures associated with persistent north-south structural trends, including at BDT1 and BDT2.

That north-south anomalism also potentially extends southwards for about 7km along a major north-south fault into the company’s southernmost BST priority target, which hosts an 11Mt inferred mineral resource averaging 1g/t gold for 360,000 ounces of contained gold.

A 5.5km southward extension from BST arrives at a zone of high-level gold anomalism at Aurum’s Nyangboue South target, at the southern limits of the company’s tenure. 

BD’s anomaly swarm also highlights a strong northeast-southwest trend that can be interpreted as potentially extending through the new BE/W application area and into the southwestern end of the BST ground at Aurum’s nearby Gemou prospect.

Aurum’s soil sampling has already defined a priority drill target at Gemou, however, it hasn’t had enough drill rigs on hand to get to it… yet. 

The company has 10 rigs operating across its Boundiali and Napié projects on other priority targets and expanding its resources.   

The new BE/E application area is contiguous with the southeast extremity of the BST ground and spans structures passing south and southwest of the 70km-long BM ground and any extensions south of the BD ground.

Future soil sampling and mapping will quickly define the significance of any structural continuities, but for now, BE/E is a useful southern bookend to the Boundiali tenements.   

Aurum can increase its interest in each tenement under the deal, from 30 per cent to 51 per cent, by completing 4000 metres of diamond drilling within each licence area. 

The company may further increase its interest from 51 per cent to 80 per cent by either completing a further 8000m of diamond drilling or by spending US$2.5M (A$3.875M) on exploration, including the initial 4000m of diamond drilling costs. 

The nominal exploration expenditure includes a diamond drilling cost of US$140 per metre of drilling, working capital, assay costs, all geochemistry and geophysical studies, trenching, air core and reverse circulation drilling and community relations.

The agreement also extends to any post-mining licence and development stage per operation, should a mining licence be granted over any part of the Encore project.

If a mining decision is made, ownership will be structured so Aurum, via Plusor, holds 80 per cent of the mine and Encore Resources and the Côte d'Ivoire government will each hold 10 per cent.

If Encore Resources elects not to contribute its 11.11 per cent pro-rata share of capital expenditure for mine development, Plusor will fund all the development costs, Encore’s interest in the mine will fall to 5 per cent and Plusor’s interest will jump to 85 per cent of the joint venture.

Aurum will start planning its first round of exploration, including a diamond drilling program on each licence area to meet its earn-in milestone, once the permit applications are approved. The company will also work with Encore, through Plusor, to achieve exploration licences for both newly acquired tenement areas. 

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