AngloGold to Invest up to US$8.9 Million (A$13.4 Million) in the Gold Project over 5 Years
EcoGraf Limited (ASX: EGR; FSE: FMK; OTCQB: ECGFF) has concluded a binding farm-in agreement with the world’s fourth-largest gold producer, AngloGold Ashanti Plc (NYSE: AU; JSE: ANG), for its non-core Golden Eagle Project in Tanzania. The agreement, formally made between the respective subsidiaries Innogy Limited (EcoGraf) and AngloGold Ashanti Holdings plc of Tanzania, provides for AngloGold to invest up to US$8.9 million (A$13.4 million) in the gold project within 5 years to acquire 70 percent of the project shares.
The partners have agreed that AngloGold will make an upfront payment of US$100,000 to Innogy once the Tanzanian Mining Commission grants the exploration permits for the Golden Eagle Project. Additionally, AngloGold has committed to minimum expenditures of US$0.9 million within two years. Only after this could AngloGold withdraw from the farm-in agreement. AngloGold owns Tanzania’s largest gold mine, the Geita Gold Mine with 9.9 million ounces. The Golden Eagle Project is part of AngloGold’s new exploration portfolio in Tanzania as the company resumes exploration in this country.
The Golden Eagle Project is located on the eastern edge of the world-class gold occurrence (+70 million ounces Gold) of the Lake Victoria Goldfields in the same structural corridor as the historic Golden Pride gold mine (3.4 million ounces of gold), which was operated by Resolute Mining Limited. The Golden Eagle Project has a total area of 578 km². Most importantly, it includes the direct, interpreted northeastern extension of the Banded Iron Formation (BIF), which hosts the high-grade Winston gold deposit, which yielded drill intersections of 16 m at 55.23 g/t gold from 116 m2. Geologists see significant potential in the project for the discovery of world-class gold deposits with multiple million ounces.
As part of previous exploration work, extensive prospecting activities were carried out within the Golden Eagle Project licenses, resulting in a considerable number of gold targets and exploration opportunities. Several highly promising, as yet untested gold occurrences as well as shear zones and faults intersect the BIF units of the Golden Eagle Project.
EcoGraf Managing Director, Andrew Spinks, commented: “The Golden Eagle farm-in agreement with AngloGold Ashanti, the world’s fourth-largest gold producer, demonstrates the high technical quality of the Innogy assets and is a further vote of confidence for the mining industry in Tanzania. We look forward to AngloGold Ashanti bringing its gold exploration expertise to Golden Eagle as the company searches for another Tier-1 gold deposit to complement its existing operation at Geita in Tanzania. This agreement provides our shareholders with a pathway to realize value from EcoGraf’s non-core minerals. It offers our shareholders the opportunity to benefit from the rising gold price while the company focuses on developing its battery anode materials business for the lithium-ion battery market.”
Conclusion: EcoGraf has positioned itself as an upcoming integrated graphite company for the global market. The groundwork for this was laid years ago, and all properties in Tanzania that are not part of the core business were separated into the subsidiary Innogy Limited. Originally, a separate IPO for Innogy was even planned, but unfortunately, the IPO did not materialize. The earn-in agreement with AngloGold is therefore part of a Plan B for the benefit of EcoGraf shareholders. In addition to the Golden Eagle Project, EcoGraf, through its subsidiary Innogy, owns a number of other gold, nickel, and lithium exploration projects in various regions of Tanzania – the Northern, Southern, and Western Frontier Projects. These Frontier projects also have significant potential for Proterozoic gold mineralization. According to its own statement, EcoGraf is already in contact with corporate groups that have expressed interest in these projects. AngloGold’s new interest in exploration in Tanzania, Barrick CEO Mark Bristow’s commitment to long-term engagement in the country, and currently the complete takeover of Australian Orecorp with its Tanzanian Nyanzaga Gold Project by Perseus (ASX/TSX: PRU) send a clear message: Tanzania will still be a factor in the coming gold bull market.
