14/08/2019 - 12:39

Castle shares skyrocket on Ghana deal

14/08/2019 - 12:39

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Shares in Castle Minerals have risen by as much as 150 per cent today, after the junior gold explorer signed a $US11.7 million ($17.2 million) farm-out agreement for two of its licences in Ghana.

Castle shares skyrocket on Ghana deal
The two licences are located in the West African country of Ghana.

Shares in Castle Minerals have risen by as much as 150 per cent today, after the junior gold explorer signed a $US11.7 million ($17.2 million) farm-out agreement for two of its licences in Ghana.

Under the deal, private Ghanian company Iguana Resources may earn up to an 80 per cent of West Perth-based Castle’s Degbiwu and Gbiniyiri licences by spending $US11.7 million in three stages over a five-year period.

In the first stage, Iguana stands to earn an initial 51 per cent interest in both licences by sole funding $US4.72 million on exploration activities over three years, with a minimum spend in the first year of $US1.22 million on Degbiwu and $US500,000 on Gbiniyiri.

Stage two will allow the company to earn an additional 14 per cent by sole funding $US1.5 million on exploration in the fourth year, while the third and final stage will allow for 15 per cent through a $US5.5 million spend in the fifth year.

Iguana must also spend a minimum of $US250,000 before it can withdraw from the deal.

Castle managing director Stephen Stone said the farm-out deal on the Degbiwu and Gbiniyiri licences would result in an acceleration of exploration activity on these prospective licences.

“In particular the Kpali target, where Castle has previously outlined an open-ended 107,200 ounces gold inferred mineral resource, and at the intriguing Bundi gold-zinc prospect,” he said.

Shares in Castle were up 100 per cent to trade at 1.2 cents each at 2.10pm AEST.

 

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