Rackla Metals (RAK.V) has entered into an agreement whereby it will acquire a 73.5% stake in the Misisi Gold Project in the DRC, which currently hosts a 3.1 million ounce gold inferred resource. The resource is located on existing mining leases covering in excess of 130 square kilometers, and those leases remain valid for another 24 years, until 2045.
The resource was based on the interpretation of assay results of 111 drill holes (105 diamond holes and 6 RC holes) for a total of 22,000 meters of drilling (resulting in a discovery of 150 ounces of gold per meter drilled, which is quite high, so perhaps we should take the resource with a grain of salt at this point until more drilling has been completed). The project is located in the DRC’s South Kivu province and was recently explored by Anvil Mining before it was acquired in 2011 for its copper assets.
The project acquisition is quite cheap as there obviously is a massive DRC discount. Rackla Metals is acquiring a 73.5% stake by making US$4.8M in cash payments and issuing 11 million shares at a deemed price of C$0.40 per share. Of the required cash payments, US$0.5M has already been paid, a second tranche of US$2.5M will be due on the closing date and the final US$1.8M will be due within 90 days after the closing date. The entire agreement is subject to Rackla being able to raise at least C$5M which is quite low considering the near-term cash payments to acquire the property are already exceeding C$5M.
It’s just too bad Rackla is a Simon Ridgway company as his previous companies haven’t really performed well. Focus Ventures went almost belly-up and has now been rebranded as Metallum Resources, Medgold Resources (MED.V) saw its share price fall from over C$0.40 in 2018 to just 5 cents now while Volcanic Gold Mines (VG.V) has seen its share price drop to less than C$0.50 after peaking above C$4 (adjusted for a share consolidation) in 2017. Maybe fourth time’s a charm?
Disclosure: The author has no position in Rackla Metals. Please read our disclaimer.
