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Volcanic to acquire 2 gold properties in Cote d'Ivoire

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Volcanic to acquire 2 gold properties in Cote d'Ivoire

Volcanic Gold Mines Inc. said March 5 that it agreed to acquire private firm JOFEMA Mineral Resources SARL, which holds the La Debo and Soubré gold properties in Cote d'Ivoire.

Under the terms, the company is required to incur US$5 million in exploration expenditures on the properties over a three-year period and make cash and share payments to JOFEMA.

Volcanic Gold will be given two options to acquire JOFEMA within 90 days of completing the expenditures.

The company may purchase an initial 65% stake in JOFEMA by paying a total of US$4 million in cash and shares and continuing to fund further exploration on the properties. The minority shareholders of JOFEMA, meanwhile, may opt to co-fund such costs on a pro rata basis. Should these shareholders choose otherwise, Volcanic Gold may dilute them to 10% by shouldering an additional US$3.8 million in expenditures.

If the minority shareholders are diluted to less than 10%, Volcanic Gold may then move to acquire the remaining equity for US$4 million in cash and shares.

Under the second option, the company may choose to fully acquire JOFEMA for a total of US$8 million in cash and shares.

The La Debo and Soubré gold properties consist of near-adjacent exploration permits and exploration permit renewals over an area of more than 600 square kilometers.