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Mets Investor > Deals-finance

Ausdrill to take share of Kouri gold

Western Australia-based drilling contractor Ausdrill (ASX: ASL) has concluded another drill-for-equity deal in Africa and consolidated its spot as Africa’s number one drill contractor.

Staff reporter

Mets Investor > Deals-finance

Ausdrill to take share of Kouri gold

Western Australia-based drilling contractor Ausdrill (ASX: ASL) has concluded another drill-for-equity deal in Africa and consolidated its spot as Africa’s number one drill contractor.

Staff reporter

Ausdrill to take share of Kouri gold

Ausdrill continues to grow its dominant position in Africa

In a deal with Burkina Faso explorer Golden Rim Resources, Ausdrill will take home a slice of Golden Rim's pie in return for drilling services, with the agreement dependent on Ausdrill drilling at least 7,500m by the end of the year.

Under the deal any drilling done by Ausdrill's West Africa subsidiary African Mining Services on its Kouri gold prospect, 230km north-east of the capital Ouagadougou, will be paid for with either cash,  shares or a mixture of both on a 50-50 basis, up to the value of US$1 million worth of shares.

An Ausdrill spokesman said drill-for-equity arrangements were a way for the company to nurture opportunities with less established customers throughout Africa, with operations established in eight countries across the continent.

The spokesman said from July 2016 to June 2017 Ausdrill invested A$3.9 million in drill-for-equity work programs and other available-for-sale investments, and divested $3.2 million of shares, for a profit of $900,000.

For Golden Rim, the deal provides financing flexibility and a means to preserve cash as it pushes on with drilling programs at Kouri to deliver a maiden mineral resource.

Golden Rim managing director Craig Mackay said Ausdrill would come in and finish off a 15,000m, 120-hole reverse circulation drilling program French driller PPI Burkina SA has been working on, with about 6,500m already completed.

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