Rackla Metals Inc. [RAK-TSXV] said Wednesday May 5 that it has struck a deal to acquire a 73.5% interest in the Misisi gold project in the Democratic Republic of Congo. The project consists of three contiguous mining leases, valid until 2045, covering 133 km2. It includes the Akyanga deposit, which hosts inferred resources of 3.1 million ounces averaging 2.16 g/t gold.
Rackla shares were trading at 40.5 cents before trading in the stock was halted at 8.07 a.m. (ET), Wednesday. The shares had been trading in a 52-week range of 50 cents and 12.5 cents.
In conjunction with the company’s shift in focus to Africa, Rackla appointed James Sullivan to its board of directors. “James brings a wealth of experience globally with senior mining companies and a significant depth of experience in the Congo and Africa,” said Rackla CEO Simon Ridgeway.
Rackla is a spin-out from Radius Gold Inc. [RDU-TSXV] and is led by Simon Ridgeway, a successful prospector and mining financier. Ridgeway is the founder and CEO of Radius, which holds a large equity position in Rackla. He is also the founder of Fortuna Silver Mines Inc. [FVI-TSX, Lima; FSM-NYSE; F4S-FSE] and is currently CEO of Volanic Gold Mines Inc. [VG-TSXV]
“The expansive 133 km2 property, which encompasses a 55-kilometre gold belt, is already host to a significant multi-million-ounce resource, which we feel has a tremendous potential for future growth,” he said.
Rackla will acquire all of the issued and outstanding shares from an arm-length vendor, Golden Mining Ltd. The project is owned Leda Mining Congo SA, of which Casa Mining Ltd. owns 73.5%, with the remaining interest in Leda held by MMG Ltd., which owns 21.5%. The DRC government holds a 5% free carried interest.
Rackla said Golden Mining has entered into an agreement with Golden Square Equity Partners Ltd. to acquire 99.43% of the outstanding shares of Casa Mining.
Under the terms of the Casa Mining agreement, Golden Mining is acquiring the outstanding shares of Casa for US$4.8 million in staged cash payments. Under the definitive agreement, Rackla said it will acquire Golden Mining by issuing up to 11.0 million common shares at 40 cents per share. It will also assume the obligation to make the staged cash payments.
The transaction is subject to Rackla completing financing that raises a minimum of $5 million.