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Volcanic Gold Mines has signed a memorandum of understanding (MoU) to acquire up to 100% of JOFEMA Mineral Resources (JOFEMA), which owns various gold properties in the Ivory Coast.

The assets covered under the MoU comprise near-adjacent exploration permits and exploration permit renewals known as La Debo and Soubré, which are located around 140km south-west of the country’s capital, Yamoussoukro.

Both assets cover a combined area of more than 600km² and fall within a mineralising shear zone.

The transaction is expected to complement Volcanic’s existing property holdings in the Mandiana district of Guinea.

"According to historic estimates dating back to 2016, the property has an inferred mineral resource of 9.5 million tonnes at a grade of 1.3g/t."

The company will also be able to consolidate its business in the Ivory Coast via the latest deal.

More than 18,000m of reverse-circulation and diamond drilling has been completed at La Debo to date.

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Other works undertaken at the property include around 40,000m of rotary air blast (RAB), air-core and auger drilling.

According to historic estimates dating back to 2016, the property has an inferred mineral resource of 9.5 million tonnes at a grade of 1.3g/t in two small isolated bodies.

Volcanic notes that the limited RAB drilling results indicate that several consistent targets are observable along strike from the historic resource.

The company will be require to invest $5m towards exploration expenditures on the properties over a three-year period in exchange for the right to acquire up to 100% of the issued shares of JOFEMA.

It will also need to make various cash and share payments.

Volcanic can either choose to acquire a 100% interest in JOFEMA by making a payment of $4m in cash and $4m in shares to JOFEMA, or complete the acquisition over two phases.

The agreement is subject to due diligence and receipt of stock exchange approval.