Corporate Update - Drilling for Equity Program MoU

RNS Number : 3673I

IronRidge Resources Limited

08 August 2019

 

08 August 2019

IronRidge signs MoU with GeoDrill for Drilling for Equity Program

For Up to US$4m or 40,000m of Drilling

Across its African Exploration Portfolio

IronRidge Resources Limited (AIM: IRR, "IronRidge" or the "Company"), the African focussed minerals exploration company, is pleased to announce that it has entered into a binding Memorandum of Understanding ("MoU") with GeoDrill Limited (TSX: GEO, "GeoDrill") for a drilling for equity program of up to US$4 million, or 40,000m of drilling. The drilling programs will take place across all the Company's gold and lithium portfolios throughout Africa.

GeoDrill, established in 1998, is a leading exploration drilling Company with a fleet of 67 drill rigs operating in Africa. The Company has operations is Ghana, Burkina Faso, Côte d'Ivoire, Mali, and Zambia.

HIGHLIGHTS:

Ø Drilling contractor GeoDrill commits up to US$4m drilling for equity program to deliver up to 40,000m of drilling across IronRidge's gold and lithium portfolio of assets

Ø IronRidge to advance all projects across Ghana, Côte d'Ivoire and Chad, whilst maintaining cash resources

Ø MoU based on competitive quotation process which provides for the issue of ordinary shares in IronRidge for 50% of the drilling cost up to a value of US$4m in two US$2m stages

Ø IronRidge will benefit from GeoDrill's extensive experience operating throughout West Africa

Ø IronRidge to maintain exploration momentum on its asset portfolio; with drilling currently underway in Ghana and drill planning underway for Côte d'Ivoire and Chad

Commenting on today's announcement, IronRidge's Chief Executive Officer, Vincent Mascolo, said:

"We are delighted to announce that the agreement with GeoDrill secures access to expert drilling capabilities, which will allow the Company to effectively advance its portfolios, whilst helping preserve cash resources.

 "GeoDrill brings decades of operational expertise throughout West Africa and, with operational centres in both Ghana and Côte d'Ivoire, provides excellent synergies with the Company's current jurisdictions of focus.

"GeoDrill's support endorses the IronRidge exploration business model, our commodity and jurisdictional portfolios and the team. We look forward to working closely with GeoDrill as we progress our portfolios."

Dave Harper, Chief Executive Officer of GeoDrill, said:

"Having previously worked with IronRidge on their Cape Coast Lithium project and Côte d'Ivoire Gold projects, we understand their exploration business model and it was an easy decision for us to partner with IronRidge in this drilling for equity program. 

"We see significant upside in IronRidge's asset portfolio, we understand Ghana and Côte d'Ivoire well, and we believe that IronRidge has the right commodity and jurisdiction diversification, with Gold and Lithium being well positioned at this time.

"We have a high degree of confidence in IronRidge's executive management team and Board, and we look forward to working with them as we advance their exploration programs in Africa."

Details of the MoU:

Under the terms of the binding MoU, any drilling services provided by GeoDrill will be paid by either; cash, shares, or a combination of cash and shares on a 50/50 basis at IronRidge's election.

The agreement is based on competitive quotation process which provides for the issue of ordinary shares in IronRidge for 50% of the drilling cost up to a value of US$4m in two (2) US$2m Stages.

The agreed payment mechanism comprises a share valuation of 90% of the 15-day volume weighted average price (VWAP) against the value of each monthly invoice. 

The MoU also allows for the equity component to be in the form of a 6-month convertible loan at IronRidge's election. The agreed pricing mechanism and payment terms for the convertible loan will be 95% of the 5-day VWAP prior the commencement of the agreed drilling program. The term of the loan will be for 6 months with an accrued annual interest rate of 8%. At completion of the 6-month term, GeoDrill may elect to be paid in shares and/or cash.

GeoDrill has agreed to a minimum 3-month lock in period from the date of issue in respect of all shares issued for each agreed drill program. This restriction shall not apply to the shares issued in respect of the convertible loan.

The MoU is valid for 24 months and can be terminated by either party within 14 days of formal notification.

Details of Current and Impending Drill Programs:

Geodrill has commenced drilling works in Ghana where approximately 13,200m of drilling has been planned at the Cape Coast Lithium project over a staged reverse circulation and diamond drilling programme dependent on results.

The Company is currently continuing field mapping and sampling programmes over the Zaranou gold project in Côte d'Ivoire ahead of a planned air-core drill programme.

In Côte d'Ivoire, the Company is assessing air-core results over its Bianouan and Bodite licenses to determine the next steps as well as soils and trenching results over its Kineta and Marahui licenses.

At this stage the Company will maintain its focus on the Côte d'Ivoire gold portfolio and the Ghana lithium portfolio.

About GeoDrill:

GeoDrill has established itself as a "one-stop shop" for drilling services providing a diverse range of drilling services throughout West Africa.

Established in 1998, GeoDrill Limited ("GeoDrill") is the leading West African based drilling company with a fleet of 67 drill rigs that provides exploration and development drilling services to major, intermediate and junior mining companies with exploration, development and production operations. The Company has operations is Ghana, Burkina Faso, Cote d'Ivoire, Mali, and Zambia, providing Reverse Circulation (RC), Diamond Core (DD), Air-core (AC), Grade control (GC), Geo-tech (GT) and Water bore (WB) drilling services.

GeoDrill's multi-purpose rigs offer the versatility of being able to perform both RC and DD drilling and can be switched interchangeably mid-way through a hole with little effort or down-time. GeoDrill also provides AC drilling which is often used in first pass exploration drill programs by exploration mining companies.

GeoDrill is listed on the Toronto Stock Exchange. The Company's ticker symbol is "GEO".

Proven West African Drilling expertise:

The Company has utilised GeoDrill's expertise on its West African portfolios including its Ghana lithium project having completed in excess of 12,000m of RC and 1,000m of DD over the first two drill phases, and in excess of 3,900m of AC in Côte d'Ivoire.

Additionally, the Company has engaged GeoDrill and drilling has commenced as part of this mandate, on a phased approximate 13,200m RC and DD drill programme on the Ghana lithium portfolio.

For any further information please contact:

IronRidge Resources Limited
Vincent Mascolo (Chief Executive Officer)	Tel: [phone]
Karl Schlobohm (Company Secretary)
SP Angel Corporate Finance LLP	Tel: [phone]
Nominated Adviser and Broker
Jeff Keating Charlie Bouverat Yellow Jersey PR Limited Harriet Jackson Felicity Winkles Tim Thompson	Tel: [phone]

Notes to Editors:

IronRidge Resources is an AIM-listed, Africa focussed minerals exploration company with a lithium pegmatite discovery in Ghana, extensive grassroots gold portfolio in Cote d'Ivoire and a potential new gold province discovery in Chad. The Company holds legacy iron ore assets in Gabon and a bauxite resource in Australia. IronRidge's strategy is to create and sustain shareholder value through the discovery and development of significant and globally demanded commodities.

Ghana

The Company entered into earn-in arrangements with Obotan Minerals Limited, Merlink Resources Limited, Barari Developments Limited and Joy Transporters Limited of Ghana, West Africa, securing the first access rights to acquire the historical Egyasimanku Hill spodumene rich lithium deposit, estimated to be in the order of 1.48Mt at 1.67% Li₂O and surrounding tenements. The portfolio covers some 684km² with the newly discovered Ewoyaa project including drill intersections of 128m @ 1.21% Li₂O from 3m and 111m @ 1.35% Li₂O from 37m, and a further identified 20km strike of pegmatite vein swarms. The tenure package is also highly prospective for tin, tantalum, niobium, caesium and gold, which occur as accessory minerals within the pegmatites and host formations.

Chad

The Company entered into an agreement with Tekton Minerals Pte Ltd of Singapore concerning its portfolio covering 900km² of highly prospective gold and other mineral projects in Chad, Central Africa. IronRidge acquired 100% of Tekton including its projects and team to advance the Dorothe, Echbara, Am Ouchar, Nabagay and Kalaka licenses, which host multiple, large scale gold projects. Trenching results at Dorothe, including 84m @ 1.66g/t Au (including 6m @ 5.49g/t & 8m @ 6.23g/t), 4m @ 18.77g/t Au (including 2m @ 36.2g/t), 32m @ 2.02g/t Au (including 18m @ 3.22g/t), 24m @ 2.53g/t Au (including 6m @ 4.1g/t (including 2m @ 6.2g/t) and 2m @ 6.14g/t), 14.12g/t Au over 4m, 34.1g/t over 2m and 63.2g/t over 1m, have defined significant gold mineralised quartz veining zones over a 3km by 1km area including the steep dipping 'Main Vein' and shallow dipping 'Sheeted Vein' zones.

Côte d'Ivoire

In conjunction with the company's 100% owned assets, IronRidge has entered into conditional joint venture arrangements in Côte d'Ivoire, West Africa; securing access rights to highly prospective gold mineralised structures and pegmatite occurrences covering a combined 3,584km² and 1,172km² area respectively. The projects are well located within access of an extensive bitumen road network and along strike from multi-million-ounce gold projects and mines.

Australia

Monogorilby is prospective for province scale titanium and bauxite, with an initial maiden resource of 54.9MT of premium DSO bauxite. Monogorilby is located in central Queensland, within a short trucking distance of the rail system leading north to the Port of Bundaberg. It is also located within close proximity of the active Queensland Rail network heading south towards the Port of Brisbane.

May Queen is located in Central Queensland within IRR's wholly owned Monogorilby license package and is highly prospective for gold. Historic drilling completed during the 1980s intersected multiple high-grade gold intervals, including 2m @ 73.4 g/t Au (including 1m at 145g/t), 4m @ 38.8g/t Au (at end of hole) and 3m @ 18.9g/t Au, over an approximate 100m strike hosting numerous parallel vein systems, open to the north-west and south-east.

Wholly owned Quaggy contains highly anomalous platinum, palladium, nickel, cobalt and copper exploration targets and is located in Central Queensland, within a short trucking distance of the dormant rail system to the Port of Bundaberg. It is also located within close proximity of the active Queensland Rail network heading south towards the Port of Brisbane.

Gabon

Tchibanga is located in south-western Gabon, in the Nyanga Province, within 10-60km of the Atlantic coastline.  This project comprises two exploration licenses, Tchibanga and Tchibanga Nord, which cover a combined area of 3,396km² and include over 90km of prospective lithologies and the historic Mont Pele iron occurrence.

Belinga Sud is Located in the north east of Gabon in the Ogooue-Ivindo Province, approximately 400km east of the capital city of Libreville. IRR's licence lies between the main Belinga Iron Ore Deposit, believed to be one of the world's largest untapped reserves of iron ore with an estimated 1bt of iron ore at a grade >60% Fe, and the route of the Trans Gabonese railway, which currently carries manganese ore and timber from Franceville to the Port of Owendo in Libreville.

Corporate

IronRidge made its AIM debut in February 2015, successfully securing strategic alliances with three international companies: Assore Limited of South Africa, Sumitomo Corporation of Japan and DGR Global Limited of Australia. Assore is a high- grade iron, chrome and manganese mining specialist. Sumitomo Corporation is a global resources, mining marketing and trading conglomerate. DGR Global is a project generation and exploration specialist.

 

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