Asante has signed an agreement with BXC Company (Ghana) to form Kubi Gold JV to develop the Kubi Mining Leases in Ghana towards production.
Both firms will be equal partners in the joint venture. BXC is a wholly owned subsidiary of Beijing Fuxing Xiao-Cheng Electronic Technology Stock Co ( BFXC). It has agreed to provide C$19.5m in funding to earn 50% of the Kubi Gold JV and a 30% equity interest in Asante.
BXC will take part in a private placement by purchasing 16,468,400 or other number of common shares required to give BXC a 30% equity interest in the then issued capital of the Asante at a price of C$0.20 per share, subject to approval from the Canadian Securities Exchange.
Asante will apply 10% of proceeds of the private placement to its unallocated working capital, and the balance to complete its initial funding of the Kubi Gold JV.
This deal is subject to final due diligence and closing is expected by the end of December.
BXC has also committed to offer additional funding to the Kubi Gold JV on commercial terms for development of extra facilities such as a production shaft, full processing facilities or expansion.
BXC has the right to maintain a 30% equity interest in new equity financings announced by Asante, and up to two seats on Asante's board of directors.
The agreement is subject to governmental and regulatory approvals.
Asante president and CEO Douglas R MacQuarrie said: “We are extremely pleased to welcome BXC as our JV partner and major shareholder to move Kubi forward to production. Their successful operating history in Ghana and strong balance sheet will complement our strengths in gold exploration, discovery and development.
"Their commitment to secure future debt funding for the joint venture gives Asante a non-dilutive path forward to fully develop the potential of Kubi.”
BXC group chairman and BFXC president Yi Cheng said: “Our financial and operating strength complements Asante’s proven exploration and development expertise. We are committed to assisting Ghana to provide electricity at competitive rates, which will enhance our growing investments in the gold mining sector.”