Shares in Tanzania-based graphite player EcoGraf (ASX:EGR) were up 7.15% to 15cps in lunchtime trades on Thursday, as the company welcomes NYSE-listed AngloGold Ashanti on-site gold acreage it owns.
EcoGraf has announced that AngloGold is aiming for a farm-in at the former’s Golden Eagle project in the Lake Victoria Goldfields, Tanzania, which is separate from the company’s flagship Epanko graphite play.
AngloGold is the world’s fourth largest gold miner and already holds considerable acreage in Tanzania, making the acquisition logical for the mining heavyweight.
EcoGraf will receive $150K for two tenements upon approval by the Tanzanian regulator. But the news isn’t a surprise to long-term EcoGraf watchers.
AngloGold began due diligence on Golden Eagle back in May last year, meaning the heavyweight has been considering the move for a year.
The Lake Victoria Goldfields and surrounding areas have been home to a number of successful gold production operations.
Underlying geology boasts much-loved greenstone belts (both relatively easy rocks to process and often coincident with gold mineralisation,) as well as veined shear zones and faults. All in all, the Golden Eagle project covers two tenements equalling 578sq.km.
That is no small part of why AngloGold’s interested in Golden Eagle. That interest is also evidenced by the terms of the farm-in deal: it’s aiming for a 70% stake outright by spending $13.5M over five years in exploration. EcoGraf is set to retain 30%.
“The Golden Eagle farm-in agreement with AngloGold Ashanti, the fourth largest gold miner in the world, demonstrates the strong technical quality of the Innogy assets and is a further vote of confidence in the mining industry of Tanzania,” EcoGraf MD Andrew Spinks said.
“This agreement is a great result from our technical team, providing a pathway to realise value for our shareholders from EcoGraf’s non-core mineral assets.”
EGR last traded at 15cps.