Perseus Mining reports that Resolute Mining have obtained a 15% interest in Orca Gold. Orca, cited on the TSX Venture Exchange (TSX-V), is a gold developer. Its core assets comprise a 70% interest in the Block 14 Gold Project (Block 14) located in northern Sudan and a 31.5% interest in Montage Gold (Montage), which owns the Koné Gold Project located in northern Côte d’Ivoire.
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As per the agreement, Perseus will obtain 39,092,233 million common shares in Orca from RSG, signifying 15% of Orca’s common shares on issue (the RSG Share Acquisition). The RSG Share Acquisition was carried out at a price of about 44.8 Canadian cents per Orca share, signifying the 10-day VWAP of Orca on the TSX-V to January 28, 2022.
The overall deliberation for the RSG Share Acquisition is about C$17.5 million. Before the RSG Share Acquisition, Perseus had no shares or other securities of Orca.
Concurrent with the RSG Share Acquisition, Perseus has agreed to offer Orca a US$5.0 million short-term loan facility (the Orca Loan Facility). Orca aims to use the payment for working capital and for the additional exploration and development of operations at Block 14. The Orca Loan Facility matures on June 30, 2022 with interest charged at a rate of 7.5% per year.
Before the RSG Share Acquisition, Perseus has taken part in private discussions with Orca regarding a probable change of control transaction whereby Perseus would acquire all the outstanding securities of Orca. Orca potentially offers Perseus exposure to two very prospective assets with substantial resource bases and is on par with Perseus’ strategy of developing a platform of long-life, extremely profitable African gold assets.
While the deliberations with regard to a possible transaction with Orca are still ongoing, any alteration of control transaction would be dependent on the fulfillment of outstanding due diligence including an assessment of the geopolitical state in Sudan by Perseus and negotiating an agreement with Orca on decisive terms, among other matters.
Consequently, there can be no declaration that any such transaction will be finished. Subject to market conditions and other factors, Perseus could, occasionally in the future, decrease or increase its direct or indirect ownership as well as its control or direction over securities of Orca via private agreements, market transactions, subscriptions from the treasury, or otherwise.
The RSG Share Acquisition and Orca Loan Facility together show the Company’s intent on working jointly with Orca and the Sudan Government to hopefully advance a stimulating development opening.
The acquisition of the 15% interest in Orca provides Perseus with a pivotal position in Orca that gives us a platform from which to further evaluate what appears to be a very exciting potential growth opportunity.
Jeff Quartermaine, Managing Director and CEO, Perseus Mining
“Perseus has recently achieved an annualised gold production rate of 500,000 ounces of gold per year from its three existing operating mines, and while it expects to be able to maintain this level of production based on exploration success around its existing gold mines, we are always seeking to identify value accretive inorganic growth opportunities. We believe that Orca could represent such an opportunity,” Jeff Quartermaine added.
Overview of Orca
Orca is a TSX-V-listed gold developer intent on the acquisition, exploration and development of mineral properties in Africa. Orca’s key asset is a 70% interest in the Block 14 Project that is situated in northern Sudan close to the border with Egypt. Orca also stated the completion of a feasibility study on the Block 14 Project in September 2020.
Orca also owns a 31.5% interest in TSX-V-listed Montage which is approaching completion of a conclusive feasibility study at its cornerstone Koné Gold Project situated in Côte d’Ivoire.
A copy of the early warning report needed to be filed with the relevant securities commissions in association with this transaction will be available on SEDAR at www.sedar.com and can be retrieved by contacting Perseus’s Company Secretary Martijn Bosboom. Perseus is being advised by Sternship Advisers.