(Alliance News) -Â Kibo Energy on Friday noted that investee Katoro Gold PLC has entered into a "strategic gold production opportunity" in South Africa.
London-listed Katoro, in which Kibo holds nearly a 55% stake, has entered into a 50-50 joint venture with Blyvoor Gold Operations (Pty) Ltd and its holding company, Target Mine Consulting (Pty) Ltd.
The venture plans to target potentially viable deposits of gold from six tailings dams owned by Blyvoor. The project already has the necessary mining license and environmental impact assessment needed for the reprocessing of the tailings.
Subject to funding, the joint venture partners are targeting initial production of up to 250,000 tonnes per month of material from the tailings as part of a plan to ramp-up output to 500,000 tonnes per month within two years.
At 500,000 tonnes per month of tailings, the project would be producing around 35,000 ounces of gold per year, Katoro said.
Under the agreement, Katoro will provide a ZAR15.0 million, around GBP790,000, to fund ongoing development work on the project. The first payment, of ZAR5.0 million, is due by Monday. To fund this, Katoro has raised GBP397,000 in the form of a convertible loan note.
Katoro has also set up a facility with Sanderson Capital Partners Ltd in which the company may require Sanderson to subscribe for up to GBP400,000 in the form of a convertible loan note.
"Katoro shareholders should note that whilst the company has a binding commitment from Sanderson to subscribe, on Katoro's request, for up to GBP400,000 to enable it to meet the additional tranches requested under the Katoro loan facility, in the event that any amount so requested is not provided and the additional tranches are sought in full, there can be no guarantee that the company will be able to provide the additional tranches as and when required, in which event the agreement will fall away and the Company will have no interest in the JV," Katoro noted.
By Lucy Heming;Â lucyheming@alliancenews.com
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Kibo Energy (KIBO)
Katoro Gold (KAT)