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EcoGraf Announces US$9.0M Gold Farm-in Agreement With AngloGold Ashanti For Golden Eagle Project In Tanzania

Ecograf Anglogold Ashanti US$9.0M Gold Farm-in Agreement Tanzania

On 23rd May 2024, graphite-focused company EcoGraf Limited (ASX: EGR; FSE: FMK; OTCQB: ECGFF) signed a binding agreement with AngloGold Ashanti Holdings plc, a subsidiary of AngloGold Ashanti Plc (NYSE: AU; JSE: ANG), for a US$9.0 million (A$13.5 million) farm-in for gold exploration on EcoGraf’s wholly-owned Golden Eagle Project in Tanzania.

The Golden Eagle Project is situated in the Lake Victoria Goldfields, a prolific gold-producing region in Tanzania, spanning 578 km² across the Singida and Manyara regions. The project has significant potential for world-class multi-million-ounce gold deposits.

Detailed due diligence by AngloGold began in May 2023. The project is located in a structurally favorable corridor, close to the historical 3.4 Moz Golden Pride gold mine operated by Resolute Mining Limited.

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The geological formations in the area include Archean greenstone belts and granitic complexes, with gold primarily hosted within veined shear zones in Banded Iron Formation units. Additionally, the area contains several untested gold prospects and shear zones, promising further exploration potential.

A farm-in project is an agreement in the mining and oil industries where one company (the “farm-in” party) earns an interest in another company’s (the “farm-out” party) project by funding exploration, development, or operational activities.

Under the terms of the agreement, AngloGold will make an initial US$100,000 payment to Innogy upon the granting of the Golden Eagle Project Prospecting Licences by the Tanzanian Mining Commission.

To earn a 70% interest in the project, AngloGold will invest US$8.9 million over five years, with EcoGraf retaining a 30% interest. AngloGold has the option to withdraw from the agreement after spending a minimum of US$0.9 million within the first two years, returning all data and samples to EcoGraf if it exits.

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Once AngloGold earns the 70% interest, EcoGraf can either contribute to maintain its stake or opt for a gross revenue royalty as the project progresses to production.

EcoGraf Managing Director, Andrew Spinks, stated, “The agreement with AngloGold Ashanti, one of the world’s largest gold miners, underscores the technical quality of Innogy’s assets and demonstrates confidence in Tanzania’s mining sector. We anticipate leveraging AngloGold’s exploration expertise to identify a Tier-1 gold deposit to complement their Geita operation in Tanzania.”

This agreement aligns with EcoGraf’s strategy to generate value from non-core mineral assets while focusing on its battery anode materials business for the lithium-ion battery market.

The Golden Eagle Project is part of AngloGold’s renewed exploration initiative in Tanzania, with a dedicated exploration office established in Dodoma.

Besides the Golden Eagle Project, EcoGraf holds other significant gold, nickel, and lithium exploration assets in Tanzania, attracting interest from various corporate groups.

Tanzania ranks among Africa’s argest gold producers, with the Lake Victoria Goldfield being a major contributor since its discovery in 1906.

Tanzania’s gold reserves are estimated at about 45 million ounces and Tanzania’s gold production in Tanzania stands at around 50t per year.

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