Arrow Minerals shares rise on acquiring drill-ready gold projects in Burkina Faso
2,500-metre drill program in Burkina Faso currently underway
Arrow Minerals Ltd’s (ASX:AMD) shares are trading 20% higher intra-day after entering into a binding agreement to acquire privately-owned exploration Company, Boromo Gold, in an all-scrip transaction worth $2.9 million.
Boromo owns six exploration projects in Burkina Faso, West Africa, with drill targets already identified at multiple projects with the potential for significant gold discoveries.
Boromo is currently completing a 2,500-metre reverse circulation (RC) drilling program at Divole East, where previous drilling by Boromo intersected 10 metres at 4.3 g/t gold from 48 metres.
Results from the current drilling program are expected to be announced in August 2019.
Boromo gold exploration projects
Arrow managing director Steven Michael said: “The acquisition of Boromo gives Arrow and its shareholders immediate access to a portfolio of gold exploration projects in one of the world’s fastest growing gold producing countries.
“Burkina Faso is now the fourth largest gold producer in Africa and has known gold endowment of over 60 million ounces.
“Boromo has held most of the exploration licences for two years and over that time has completed first pass exploration, including geochemistry (soil and stream sediment sampling), auger drilling and geophysics (airborne and ground EM surveys).
“There are now drill-ready targets at multiple projects, with drilling at Divole East currently underway.”
Diamond drilling locations at Divole Main Prospect
Boromo’s largest shareholder, GenGold Resource Capital has converted 75% of its shareholding in Boromo to performance rights (PR), demonstrating significant support for the transaction and alignment of value for all shareholders.
Arrow will issue ten Arrow shares for each Boromo share and 10 Arrow PR for each Boromo PR, valuing Boromo at $2.9 million (excluding PR).
The acquisition is subject to Arrow shareholder approval at a shareholder meeting expected to be held in early-August 2019.
Capital raising and strategic alliance
Arrow has received commitments from corporate, institutional and professional investors to raise $2 million through a two-tranche equity placement at an issue price of one cent per share plus a one for two attaching option.
Arrow has also entered into a strategic alliance with Capital Drilling Ltd (LON:CAPD) who will subscribe for $0.8 million of shares in the placement and will provide drilling services to Arrow in Burkina Faso over an initial two-year period.
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Michael added: “Following completion of the capital raising, Arrow will be well funded to aggressively explore its gold projects in Burkina Faso and Western Australia, with a focus on high-quality drill targets and year-round exploration.
“Also, the support of Capital Drilling, both strategically and financially, will enhance Arrow’s ability to complete multiple drill programmes in Burkina Faso.”
Board and management changes
Arrow will restructure its board and management to add significant West African gold exploration experience, including the appointment of Howard Golden as chief executive officer and Tommy McKeith and Morgan Ball as non-executive directors.
Arrow’s managing director, Steven Michael, will continue as an executive director of the company and chairman of the board, Dr Frazer Tabeart, will remain in this position.
Current non-executive director, Nicholas Ong, will retire from the board.
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Michael said: “The changes in board and management will be a key driver for the future success of the Company and returns to shareholders.
“Specifically, Howard Golden and Tommy McKeith have decades of experience working in West Africa and will ensure the seamless integration of the two companies.
“Finally, I would like to thank Nicholas Ong for his support and commitment to Arrow over the past eight years.”