GOLDSTONE RESOURCES LIMITED
("GoldStone" or the "Company")
Co-Existence Agreement with Ferrex plc
GoldStone (AIM: GRL), the AIM quoted company focused on gold in West and Central Africa, announces that it has concluded a co-existence agreement with iron-focused Ferrex plc in relation to GoldStone's Oyem licence in Gabon.
Highlights:
· Agreement signed for Ferrex to explore for iron in an area overlapping with GoldStone's Oyem licence
· Ferrex to undertake a work programme to explore for both iron and gold, providing GoldStone with valuable data on the area
· GoldStone to receive a 1% royalty on any iron ore produced, as well as the partial reimbursement of certain past costs
Jurie Wessels, GoldStone's Chief Executive Officer, commented: "The agreement recognises GoldStone's preferrent rights, does not interfere with our existing exploration efforts, allows us to explore vicariously the southern part of the Oyem licence and gives us the prospect of a royalty income should Ferrex be successful with its iron-focused exploration in the area."
Ferrex plc, through its controlled subsidiary Equatorial Resources SARL ("Equatorial"), has applied for exploration rights for iron over an area that overlaps with GoldStone's Oyem licence (the "Overlapping Area"). Regulations issued by the Ministry of Mines of Gabon require GoldStone to consent before an exploration licence may be granted over the Overlapping Area. GoldStone and Equatorial have therefore concluded an agreement setting out the terms under which Equatorial shall conduct exploration and exploitation activities (the "Co-Existence Agreement").
Under the Co-Existence Agreement, Goldstone has agreed to allow Equatorial (whose obligations Ferrex is liable to perform if Equatorial fails to do so) to explore for iron over the Overlapping Area, provided that GoldStone's pre-existing rights (to explore and mine gold or other elements and associated minerals) are not affected and that such rights will carry preference over Equatorial's rights to explore and mine iron ore.
The Co-Existence Agreement determines that:
- GoldStone will be entitled to a 1% Gross Smelter Continuous Royalty calculated on a FOB basis on any iron ore produced and sold by Equatorial from the Overlapping Area.
- Equatorial limits its exploration to banded ironstone formations ("BIF") only and any unmapped areas within 1km of the BIF.
- Equatorial agrees to undertake systematic soil sampling (and Ferrex agrees to make funds available to Equatorial to give effect to this):
(i) of the BIF areas for both iron and gold on a 100m by 400m grid; and
(ii) on a 50m by 200m grid within 200m of previously identified BRGM gold occurrences and areas identified by GoldStone's geophysicist as prospective;
- Equatorial will assay the above samples and all drill core (drilled by Equatorial) for both iron and gold unless GoldStone otherwise instructs; and
- Equatorial will pay 50% of GoldStone's expenses incurred towards road access to the Oyem licence and 50% of GoldStone's costs in purchasing SYSMIN data relating to the Oyem licence area.
The Co-Existence Agreement determines further that if meaningful gold mineralisation is found to exist at any stage prior to the commencement by Equatorial of a pre-feasibility study, which will only commence after definition of a JORC compliant resource across the BIF areas, that would justify a reasonable gold exploration company acting under similar circumstances to continue with exploration on the Overlapping Area, Equatorial will cease all work.
Enquiries
GoldStone Resources Limited |
+27 21 551 9009 |
Jurie Wessels |
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WH Ireland Limited |
+44 20 7220 1666 |
Tim Feather |
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Nick Field |
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Optiva Securities Limited |
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Jason Robertson |
+44 20 3137 1906 |
Jeremy King |
+44 20 3137 1904 |
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