QUEBEC CITY, QUEBEC--(Marketwired - May 28, 2014) - Komet Resources Inc. ("Komet") (TSX VENTURE:KMT) announces that it has signed a memorandum of understanding to acquire the Guiro gold mine owned by Stremco SA ("Stremco"), a private company in Burkina Faso.
Stremco owns the 65 km2 Guiro's exploration and operating license (Decree 2007-120 dated March 5, 2007) and was operating until July 2013 a "small scale mine" according to the mining code of Burkina Faso (200 tons per day maximum).
Based on a feasibility study carried out in 1997 by European Mining Finance Ltd, i.e. prior to the National Instrument 43-101 concerning information on mining projects ("NI 43-101"), the government of Burkina Faso granted an exploration permit by Ministerial Order (arrêté ministériel) No 94-097 dated May 6, 1994 and a small scale mine production permit by Presidential Decree (décret du president) No 2007-120 dated March 5th, 2007. An environmental impact assessment was released in January 2004, in accordance to the law.
Guiro mine produced from 2011 until July 2013. According to unverified information provided by Stremco, 18,267 tonnes at 8.58 g/t Au was processed in 2011, 21,904 tonnes at 9.46 g/t Au in 2012 and 9,490 tonnes at 6.69 g/t Au until July 2013, when the operations stopped. All the historical data and information above have not been verified and are not in accordance with NI 43-101 standards for disclosure.
The Memorandum of Understanding specifies, amongst other matters, the following provisions:
- Provide Stremco with an amount of $600,000 CAD that will be used to clear Stremco's liabilities with a creditor of Stremco. This amount will be kept in trust until obtaining a final release and discharge from such creditor.
- Komet agrees to assume Stremco's existing debt towards Société Générale des Banques of Burkina Faso, that currently amount to $2,174,300 CAD;
- Issue 3,000,000 common shares to Stremco, which represents less than 10% of the total number of shares issued and outstanding;
- Komet will grant Stremco a gross royalty of 2% of gold sales made above the amount of $1,300 CAD/ounce (spot price). The payment will be made in installments by Komet from the 6th month following the restart of production date of the Guiro mine, up to a maximum of 2,000,000 CAD).
The transaction must be approved by Komet's Board, Canadian regulatory and market authorities and Burkina Faso government authorities. The memorandum of understanding is valid until June 1, 2014.
Stremco is at arm's length with Komet.
Jacques Marchand, P.Eng. P.Geo., is the Qualified Person who has reviewed this news release and is responsible for the technical information presented there, including verification of the data disclosed.
More information about the corporation is available at: www.kometgold.com
Neither TSX Venture Exchange nor the regulatory service provider (as the term is defined in TSX Venture Exchange's policies) accepts any liability of any kind as to the authenticity or accuracy of this release.
This press release contains statements that may constitute "forward-looking information" or "forward-looking statements" as set out within the context of security law. This forward-looking information is subject to many risks and uncertainties, some of which are beyond Komet Inc.'s ("Komet") control. The actual results or conclusions may differ considerably from those that have been set out, or intimated, in this forward-looking information. There are many factors which may cause such disparity, especially the instability of metal market prices, the results of fluctuations in foreign currency exchange rates or in interest rates, poorly estimated reserves, environmental risks (stricter regulations), unforeseen geological situations, unfavorable extraction conditions, political risks brought on by mining in developing countries, regulatory and governmental policy changes (laws and policies), failure to obtain the requisite permits and approvals from government bodies, or any other risk relating to mining and development. There is no guarantee that the circumstances anticipated in this forward-looking information will occur, or if they do occur, how they will benefit Komet. The forward-looking information is based on the estimates and opinions of Komet's management at the time of the publication of the information and Komet does not assume any obligation to make public updates or modifications to any of the forward-looking statements, whether as a result of new information, future events, or any other cause, except if it is required by securities laws.
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