DFR Gold Inc. Announces Amendment of WUO Land Option and Insider Loans
10 June 2024
DFR Gold Inc. Announces Amendment of WUO Land Option and Insider Loans
Vancouver, B.C. (10 June, 2024) – DFR Gold Inc. (TSX‐V:DFR) (“DFR” or the “Company”) announces
that its 80% controlled subsidiary, Moydow BF Limited (“Moydow”), has entered into an agreement
to amend the terms of the option agreement dated 5 November 2020 among Aristide Jean Clement
Boudo, EXMA, Panthera Resources Plc and Moydow Holdings Limited (the “Option Agreement”).
Moydow Holdings Limited, Moydow and Mr. Boudo entered into a deed of novation on June 4, 2021,
pursuant to which Moydow Holdings Limited transferred its rights to Moydow.
Pursuant to the Option Agreement, Moydow has an option (the “Option”) to acquire 100% right, title
and interest in the WUO Land exploration permit, initially issued on 6 March 2018 and expiring on 5
March 2027 (the “Permit”), relating to the Company’s Cascades project in Burkina Faso.
The amendment of the Option Agreement (the “Amendment Agreement”) is, as further explained
below, expected to enable the Company to prioritise spending on exploration work and ensure the
alignment of interests of the parties to the Option Agreement by, among other things, deferring half
of the Option payment, extending the maturity date of the Option Agreement, and altering the basis
of the royalty payment to Mr. Boudo as the holder of the Permit (the “Licence Holder”).
Moreover, the Company has entered into agreements with Spirit Resources SARL (“Spirit”) and Brian
Kiernan (“Kiernan”), holding respectively 39.9% and 37.6% of the Company’s outstanding and issued
share capital, pursuant to which Spirit and Kiernan will provide, in aggregate US$500,000 as loans to
the Company to fund the Initial Payment (as defined below) under the amended Option Agreement.
Amendment of the Option Agreement
Pursuant to the Option Agreement, Moydow held an exclusive option, exercisable until 27 May 2024
and upon payment of US$1,000,000, to purchase 100% of the Licence Holder’s interest in the Permit.
The Company’s objective in relation to its Cascades project, which is shared by the License Holder, is
to prioritise spending on exploration work and to align the interests of the License Holder to those of
the Company. As a result, the Company and the License Holder have agreed to amend the terms of
the Option Agreement by entering into the Amendment Agreement. Pursuant to the Amendment
Agreement, amongst other things:
o the Company shall pay US$500,000 (the “Initial Payment”) to the License Holder
within 8 business days of executing the Amendment Agreement; and,
o the Company shall pay US$500,000 (the “Final Payment”) to the License Holder, to
exercise the Option, on or prior to the first anniversary of the date of the Amendment
Agreement.
Prior to executing the Amendment Agreement, the License Holder was entitled to receive a quarterly
royalty payment equivalent to 1% of the net smelter return (“NSR”), subject to a maximum
entitlement of US$2,000,000, and a one off payment of US$1,000,000 (the “Milestone Payment”),
payable within six months of the Company reporting a resource of at least 1,000,000 ounces of gold
on the Permit in accordance with the JORC guidelines.
Under the Amendment Agreement:
the License Holder is entitled to a royalty payment of 0.5% of NSR over the duration of mining
on the Permit. If the Milestone Payment described above is paid, each royalty payment
thereafter shall be reduced by 25% until such time as the aggregate amount of the said 25%
reductions equal the amount of the Milestone Payment;
if the Company operates a small production mine designed to produce up to 30,000 ounces
of gold per annum with an intended duration of five years on the Permit, the License Holder
shall have the first right of refusal to be appointed as the mining and mine services contractor
on such mine pursuant to a contract based on terms to be negotiated at arm’s length, that is
on similar terms and conditions as other mining and mine services contractors operating in
Burkina Faso, or alternatively West Africa, at the time of such appointment; and,
the License Holder is authorised to apply for semi‐mechanised permits (“SMP”) on the
property area, except on areas where the Company intends to operate. The Company shall be
free to explore or mine on the areas of the SMP, and the License Holder shall suspend any
activity on the areas of the SMP so long the Company undertakes mining operation on such
areas of the SMP.
The Loans
The Company also announces that it has entered into agreements with insiders Spirit Resources SARL
(whose beneficial owner is Jean‐Raymond Boulle) and Brian Kiernan, holding respectively 39.9% and
37.6% of the Company’s outstanding and issued share capital, to provide a term loan facility of
US$500,000 in aggregate (the “Loan”) to the Company. The terms of the Loan are summarised as
follows:
Each of Spirit and Kiernan shall finance 50% of the Loan;
The Loan is available in one drawdown from each of Spirit and Kiernan and shall be used
exclusively to execute the Initial Payment;
The Loan is unsecured and bears interest at the rate of 8% per annum;
The Loan is repayable in full on or before 31 May 2025 (the “Repayment Date”); and
The Company shall repay the Loan earlier if it completes a financing equivalent to
US$2,000,000 or more prior to the Repayment Date.
This Loan constitutes a related party transaction (the “Transaction”) as defined under Multilateral
Instrument 61‐101 – Protection of Minority Security Holders in Special Transactions (“MI 61‐101”).
The Transaction is exempt from the formal valuation requirements of Section 5.4 of MI 61‐101
pursuant to Subsection 5.5(b) of MI 61‐101 as no securities of the Company are listed on certain
exchanges specified by MI 61‐101, and exempt from the minority shareholder approval requirements
of Section 5.6 of MI 61‐101 pursuant to Subsection 5.7(1)(a) of MI 61‐101 as, at the time the
Transaction was agreed to, neither the fair market value of the subject matter of the Transaction nor
the consideration therefor exceeded 25% of the Company’s market capitalization.
Other Updates
Gurara Project
The Company announced, on 7 May 2024, definitive agreements with Panthera Resources Plc. to
exchange its 40% interest in the Kalaka gold project (Mali) for a further 25.5% ownership interest in
the Gurara project in Nigeria (the “Reorganisation”). The Reorganisation has been approved as an
Expedited Acquisition under TSXV Policy 5.3, and the subsequent administrative work and filings have
been completed. As a result, the Company now holds a direct 51% interest in the Gurara project and
no interest in the Kalaka gold project.
Commenting on the WUO Land option agreement, Brian Kiernan, CEO and President said:
“The amendment of the Option Agreement enables the Company to focus on the development of the
Cascades Gold Project in Burkina Faso and aligns the interests of the License Holder to those of the
Company. The Cascades Project is DFR’s most advanced project with a maiden Mineral Resource
declared and where there is considerable immediate upside potential.”
About the Cascades project and WUO land exploration permit
DFR has acquired an 80% interest in the Cascades project and Panthera Resources Plc. (“Panthera”)
will own a carried 20% interest on the condition that DFR invests US$18,000,000 (the “Deemed Cost
Base”) in the project by September 30, 2026. Panthera shall have the right to acquire an additional
10% interest in Cascades by making a payment of US$7,200,000 (or lower if DFR does not spend
US$18,000,000) following the Trigger Date (being the earlier of DFR achieving the Deemed Cost Base
or September 30, 2026), thereafter, all interests shall be participating. The Cascades gold exploration
project comprising initially of an option for the WUO Land (“WUO Land”) exploration license,
broadened in geographic scope through the acquisition of an option to acquire the WUO Land 2
exploration license, which is contiguous to the WUO Land license. The WUO Land 2 option has been
exercised through the payment of US$300,000 option exercise fees to the License Holder, announced
on February 9, 2024. The project is located in the Banfora greenstone belt of the West African Birimian
Supergroup in Comoé province, southwest Burkina Faso. Cascades is approximately 370km west‐
southwest of Ouagadougou, and 100km northeast of the Wahgnion gold mine, operated by Endeavour
Mining.
The Permit was initially issued on 6 March 2018, renewed a first time in 2021 before the second and
last renewal in 2024, and will expire on 5 March 2027. The license area has been reduced by 25% to
46 Km2 in accordance with prevailing laws. Moydow acquired the WUO Land option in 2020 and has
benefitted from exploration activities undertaken at Cascades by previous operators High River Gold
Mines Limited (“HRG”) (now Nord Gold SE (“Nord Gold”)) and Taurus Gold Limited (“Taurus”) having
executed an Exploration Data, Reports and Samples Purchase Agreement on October 9, 2020 with
Nord Gold to purchase all of their historic data in consideration of a 0.5% Net Smelter Royalty (NSR)
capped at US$3,000,000. The historic information includes over 65,000 metres of drilling. Moydow
consolidated all the previous exploration data into a single database and proceeded with its inaugural
exploration drilling program in 2021, consisting of 4,739 meters of reverse core drilling. The results of
the Moydow’s drilling showed strong reproducibility of the HRG and Taurus drill data both in terms of
location of mineralization and grade. Moreover, the brownfields exploration drilling showed good
predictability of the location of mineralization in extensional drilling to the mineral resource. The HRG,
Taurus and Moydow data was therefore taken as sufficiently accurate to be used in the estimation of
the maiden mineral resource estimates (MRE) for Cascades. On October 25, 2021, the Company
announced a maiden Mineral Resource prepared in accordance with National Instrument 43‐101 for
the Company’s Cascades project, and amended on April 20, 2022, reporting:
Indicated resource of 5.41 million tonnes at an average grade of 1.52 g/t Au for a total 264,000
ounces of gold; and
Inferred resource of 6.93 million tonnes at an average grade of 1.67 g/t Au for a total of 371,000
ounces of gold.
The MRE is based on a total of 69,787m of drilling and has been prepared by Mr. Ivor W.O. Jones,
M.Sc., FAusIMM, P.Geo, for Aurum Consulting, who is an independent Qualified person (QP) under NI
43‐101 guidelines. The MRE was estimated using ordinary kriging methodologies, standard estimation
practices and constrained by an open‐pit evaluation based on a US$1,900 per ounce gold price and
reported using a cut‐off grade of 0.5 grams of gold per tonne ("g/t Au").
Ends.
DFR Gold Inc.
Jean Charles, CFO & Secretary
Contact: [email protected] +1 604 283 7185 +230 5253 9663
Michael Oke/Andy Mills: +44 20 7321 0000
Aura Financial LLP: www.aura‐financial.com
Notes to Editors:
Approval of disclosure of technical information
Mr. Kieran Harrington PGeo EurGeol, Vice President Exploration of DFR Gold Inc. and a Qualified
Person as defined under Canadian National Instrument 43 101 – Standards of Disclosure for Mineral
Projects (“NI 43 101”), has reviewed and approved the technical information contained in this report.
About DFR Gold
DFR Gold is a TSX Venture Exchange listed exploration and mine development company focused on
gold in West Africa. DFR Gold holds interests in a portfolio of West African gold exploration projects
including the highly prospective Cascades gold project (“Cascades”) in Burkina Faso. Cascades has a
Mineral Resource prepared in accordance with NI 43‐101 comprising 5.41 million tonnes of indicated
resources at an average grade of 1.52g/t Au for a total 264,000 ounces of gold and 6.93 million tonnes
of inferred resources at an average grade 1.67g/t Au for a total of 371,000 ounces of gold. Please see
the Company’s technical report titled “Amended and Re‐stated Technical Report on the Labola Project
Burkina Faso” dated April 2, 2022, with an effective date of April 20, 2022 for further information
regarding Cascades. This report can be located at www.dfrgold.com.
DFR Gold holds a controlling interest in Gurara Holdings Limited which holds mineral licenses (the
“Gurara Project”) in Nigeria through its Nigerian subsidiaries. The Gurara Project is a prospective
frontier stage gold project in a geologically attractive but underexplored area of Nigeria, comprising
four licences in two project areas (Dagma and Paimasa) in Western Nigeria. The Gurara Project lies
within the gold‐bearing ("Schist Belt") terrain of the Benin‐Nigeria Shield where historically very little
systematic exploration has been undertaken, and which has broad similarities to the Birimian of the
Man Shield of West Africa. At Dagma a quartz vein swarm has been identified and a bulk sample of
vein quartz gave an average assay of 22.2 gramme per tonne gold.
In Madagascar, DFR Gold has an advanced high grade hard rock zircon exploration prospect located in
the west of the country, approximately 220km east of the port of Maintirano and close to a state road
(the “Beravina Project”). The Company filed a NI 43‐101 compliant technical report for the Beravina
Project on January 29, 2019, reporting an Inferred Mineral Resource Estimate of 1.5 million tonnes
grading 22.7% Zircon (ZrSiO4) (equivalent to 15.3% ZrO2). This report can be located at
www.dfrgold.com.
Website: www.dfrgold.com
The Company’s public documents may be accessed at www.sedarplus.ca
Neither the TSX‐V nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward‐Looking Statements:
This release contains certain “forward‐looking information” within the meaning of applicable Canadian
securities legislation. All statements other than statements of historical fact in this release that address activities,
events or developments that DFR Gold expects or anticipates will or may occur in the future are forward‐looking
statements or information. Forward‐looking statements in this news release include statements regarding the
potential of the Cascades project, the continued capacity to obtain financing and effect the Final Payment,
obtaining financing and investing US$18,000,000 on the Cascades project prior to 30 September 2026 to retain
the Company’s 80% interest in the Cascades project and the renewal of the WUO Land 2 exploration permit.
Often, but not always, forward‐looking information can be identified by the use of words such as “aim”, “aspire”,
“strive”, “will”, “expect”, “intend”, “plan”, “believe” or similar expressions as they relate to DFR Gold. Forward
looking information is subject to a variety of risks and uncertainties which could cause actual events or results
to materially differ from those reflected in the forward‐looking information.
There are a number of important factors that could cause DFR Gold’s actual results to differ materially from
those indicated or implied by forward‐looking statements and information. Such factors include, among others:
the ability to obtain requisite regulatory approvals; the ability to renew mineral licenses and secure new
exploration licenses the ability to finance drilling campaigns and exercise its options to acquire exploration
permits; exploration works delivery the expected results; the commodity prices; the gold exploration and mining
industry in general; the potential impact of the announcement on relationships; including with regulatory
bodies, employees; suppliers, customers and competitors; changes in general economic, business and political
conditions, including changes in the financial markets; changes in applicable laws; and compliance with extensive
government regulation. Should one or more of these risks, uncertainties or other factors materialize, or should
assumptions underlying the forward‐looking information or statement prove incorrect, actual results may vary
materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
DFR Gold cautions that the foregoing list of material factors is not exhaustive. When relying on DFR Gold’s
forward‐looking statements and information to make decisions, shareholders should carefully consider the
foregoing factors and other uncertainties and potential events. DFR Gold has assumed that the material factors
referred to in the previous paragraph will not cause such forward looking statements and information to differ
materially from actual results or events. However, the list of these factors is not exhaustive and is subject to
change and there can be no assurance that such assumptions will reflect the actual outcome of such items or
factors. The forward‐looking information contained in this release represents the expectations of DFR Gold as
of the date of this release and, accordingly, is subject to change after such date. Readers should not place undue
importance on forward looking information and should not rely upon this information as of any other date.
While DFR Gold may elect to, it does not undertake to update this information at any particular time except as
required in accordance with applicable laws.