Antler Gold seeks stake in Erongo’s exploration space

CANADA-BASED gold-prospecting and mining company Antler Gold Inc has entered into an agreement with Rhombus Investments (Pty) Ltd to buy 75% of its gold exploration licence for a maximum consideration of N$3,3 million.

In an announcement last month, Antler Gold said the 75% stake will be acquired through a mix of cash, shares and expenditure cover on the exploration project amid fulfilment of other conditions. To date, over N$660 000 cash has already been paid to Rhombus.

Rhombus has had the exploration licence since January 2014 and it is the sole asset of the company.

The exclusive exploration licence (EPL) 5455 covers approximately 32,7 square kilometres and is located west of Usakos, in the Erongo region.

This is the same area surrounding the licence hosts of two producing gold mines (Navachab and Otjikoto) in the Damara supergroup as well as Osino Resources’ Karibib gold project and several other smaller deposits.

In the announcement, the Canadian company also showed possible interest in buying the entire licence.

“Once Antler acquires the 75% interest in the private company, it has the right to purchase the remaining 25% minority interest at the fair market value determined by a professional business valuator selected by Antler,” the announcement read.

Furthermore, if Antler does not buy the remaining 25%, both shareholders [Antler and Rhombus] will contribute, on a pro-rata basis, towards the funding of the company’s activities, including exploration expenditure.

“Should the minority shareholders be diluted below 10%, then their interest will automatically convert to a free carried 5% interest in EPL 5455, which Antler can purchase at a price to be determined by a professional selected by Antler using international best practices for evaluating mining assets,” the announcement said, indicating another condition.

In another condition on ownership, Antler said if within three years from the date of the agreement Rhombus acquires an interest in any EPL in Namibia, then such additional interest must be offered in writing to Antler for an amount to be mutually agreed upon.

The mix of the consideration include over N$660 000 of the N$3,3 million which has already been paid to Rhombus – a non-refundable cash deposit of N$110 000, and N$550 000 which was paid upon signing of the agreement – as well as N$1,1 million for marking the first and second anniversary.

The N$1,1 million will be paid in shares.

In addition to the cash and share consideration above, Antler must also spend N$829 000 on exploration within 12 months from the Due Diligence Waiver Date and N$1,3 million within 24 months.

“Antler has the right to accelerate the payment of cash and share consideration and the timeline for incurring exploration expenditures,” said the company in the announcement.

On the same EPL, the company said Rhombus has performed past work exploring for graphite on a portion of the licence and should a transaction be made to sell or form a joint venture in the graphite area, Rhombus shareholders will retain 90% of the proceeds and Antler is entitled to 10%.

The transaction is not yet finalised and is subject to Antler receiving all necessary approvals, including the Toronto Stock Exchange Venture Exchange approval.

Email: lazarus@namibian.com.na

Twitter: @Lasarus_A

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