Pelangio has reported that work on the Dormaa Project to date included stream sediment surveys into the secondary and tertiary drainages in the licensed area; soil sampling using the BLEG technique on an 800 metre by 100 metre grid; and follow-up, closer-spaced, soil surveys of 400 metres by 50 metres and 100 metres by 25 metres grid on the northern half of the Dormaa Project area, which identified thirteen gold-in-soil anomalies.
In addition, Pelangio reported that eight significant anomalies, ranging in size from 800 metres by 100 metres up to 4 kilometres long and 500 metres wide were identified in the southern half of the Dormaa Project area and that a 20 square kilometre follow-up geochemical program, is recommended for this region. As well, Pelangio reported that recent satellite imagery indicates that substantial unregulated artisanal and mechanized alluvial operations were carried out during 2014-2015 in areas surrounding the Dormaa Project, and that gold-in-soil anomalies on the Dormaa Project may be the source of the alluvial deposits giving rise to these operations. RosCan has not verified the foregoing historical information about the Dormaa Project.
Based on a preliminary work plan approved by RosCan and Pelangio for the first year, expenditures of approximately $300,000 are planned for expanded gold-in-soil geochemical surveys, prospecting, and approximately 3,000 metres of reverse circulation and air core or rotary air blast drilling. This program is designed to follow up on the large gold-in-soil anomalies on the property.
Additionally, a three-phase work program has been designed to follow up on this previous work with an allocated budget of $2M. This work program consists of the following:
Geochemical in-fill in the south-eastern portion of the Dormaa concession, covering some 115 line-kilometres, followed up by 3500 m of Air Core and Reverse Circulation (RC) drilling on the best geochemical targets
Follow up drilling from Phase 1 results (a total of 8000 m.), and Air Core, RC and RAB drilling on second-priority geochemical targets
Dominantly RC drilling 6000 m of 8500 m total drilling to follow up on Phase 2 results
To exercise the Option, RosCan is required to:
1) pay Pelangio an aggregate of $160,000, as follows:
2) fund a total of $2,000,000 for exploration expenditures, as follows:
3) pay the applicable annual ground rent and mineral right fees during the
Option period, when such costs are first due and payable.
During the Option period Pelangio will act as the operator. In addition, RosCan will participate in the oversight of exploration and operational activities through a management committee. The Company expenses exploration expenditure contributions at the time they are made, though such contributions may be expended by Pelangio at a later date. The exploration expenditure contributions are to be held in a separate bank account by Pelangio for the benefit of the Company and only expended in accordance with the work programs and land holding costs pursuant to the Option Agreement.
Upon the exercise of the Option, a joint venture between RosCan and Pelangio would be formed, whereby each party would have an initial 50% participating interest, and thereafter contribute funding on a proportionate basis or have its interest diluted.
Once formed, the joint venture would hold 100% of the mineral rights to the Dormaa Project, subject to a 2% net smelter royalty (“NSR”) on all ounces of gold recovered and a 10% free carried interest reserved for the Government of Ghana. The joint venture retains the right to buy-back 50% (equivalent to 1%) of the NSR for USD $2,000,000.
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Segando-South And Moussala-North Gold Permits In West Mali
Roscan has interests in two properties in West Africa. The Dorma Property in Ghana, and the Kandiole Project in West Mali
Sefwi-Bibiani Belts, Wet Africa.
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On November 7, 2016, RosCan entered into an option and joint venture agreement (the “Option Agreement”), as amended on February 14, 2017, with Pelangio Exploration Inc. “(Pelangio”), pursuant to which RosCan and Pelangio established an earn-in arrangement to jointly advance an early-stage gold exploration project in Ghana, West Africa (the “Dormaa Project). Pelangio owns a 100% interest in the Dormaa Project and pursuant to the Option Agreement, RosCan has the right (the “Option”) to earn a 50% equity and participating interest in the Dormaa Project.
The Dormaa property is a single concession of approximately 86.44 square kilometres and is located in the Ahafo Ano District of the Ashanti and Brong-Ahafo Regions of the Republic of Ghana. It is located in proximity to the Sefwi-Bibiani Belt, one of the most significant Proterozoic greenstone gold belts in the world, which is host to Newmont’s Ahafo and Kinross’ Chirano gold mines.