London-listed Acacia Mining has signed the definitive documentation required to terminate its earlier earn-in agreement with TSX-V- and FSE-listed Sarama Resources over the South Houndé project, in Burkina Faso.
Acacia announced in November last year that it would divest of the project, following a review of its exploration portfolio. The project was deemed to be noncore.
Sarama will regain 100% ownership of the project.
As part of the termination, it will pay Acacia $2-million in staged payments. Acacia is also entitled to a $2-million payment once commercial production at South Houndé starts and will retain a 1% to 2% net smelter return royalty, based on a sliding rate basis on the gold price received and capped gold production of one-million ounces.
Acacia will also be granted five-million warrants for common shares in Sarama, exercisable for five years.
Acacia on Wednesday said it remains committed to exploration in Burkina Faso, with various earn-in agreements that provide it with exposure to about 2 000 km² of the prospective Houndé Belt, still active.Creamer Media Senior Deputy Editor Online