The Abzu Gold Limited says it has entered into an agreement with Kinross Gold Corporation’s subsidiary, Red Back Mining Ghana Limited, pursuant to which it has acquired an option on 10 mining concessions in Ghana.
Under the agreement, Abzu Gold has the right to earn 51% of Red Back’s holding in these concessions by incurring exploration expenditure of a total of $3 million.
The $3 million expenditure will be in a format of $500,000 in the first year, $1 million in year 2, and $1.5 million in the third year.
“Once the S$3,000,000 option expenditures have been fulfilled, Abzu and Kinross will form a joint venture which Abzu will manage and to which both companies will contribute proportionately to their interest”, Abzu said a statement on June 29, 2011 on its website.
This agreement and commencement of work on these concessions are subject to the approval of the Ghana Minerals Commission, said the Toronto Stock Exchange listed company based in Vancouver, Canada.
Abzu said the government of Ghana retains a 10% free carried interest in all concessions as per the mining legislation of Ghana.
The ten mining concessions are located along the Bole-Nangodi Belt, the Sefwi Belt and the Ashanti Belt.
By Ekow Quandzie