Mako Gold Limited (ASX:MKG) has signed a binding Memorandum of Understanding (MOU) with Geodrill Limited whereby Geodrill may subscribe for up to US$1M worth of shares in the capital of the company in return for drilling services at Mako’s discretion.
Under the terms of the agreement Mako agrees to commit up to US$2M worth of reverse circulation (RC) drilling, diamond drilling (DD), or air core (AC) drilling with Geodrill. The agreement is valid for 12 months, in two six-month stages of up to US$1M each.
After receipt of each monthly invoice, and with the issue price for each share being the previous 15-day VWAP immediately prior to the date of the relevant monthly invoice, Mako may issue MKG shares to Geodrill, constituting up to 50% of the invoice for drilling services provided by Geodrill and pay the remaining balance in cash.
Mako has access to this facility for 12 months and may, at its discretion, choose to pay 100% in cash, and is under no obligation to drill a minimum amount or any amount at all.
Geodrill has agreed to a three-month escrow on shares issued to them and thereafter, to notify Mako of its intention to sell shares five days in advance.
Each party can terminate the MOU at any time by giving the other party 14 days’ notice.
The agreement effectively allows Mako to drill at half of its normal drilling contractor cash costs, thereby allowing the company to preserve cash, while continuing its drill programmes.
Mako proposes to implement the drill-for equity facility on its upcoming drill programmes.
“We are pleased to have secured a drill-for-equity agreement with such a high-calibre drilling company,” Managing Director, Peter Ledwidge, said.
“We have a long-standing relationship with Geodrill and have always been impressed with the quality of their work, including their extraordinary ESG initiatives in the communities where they operate.
“Geodrill has been on the MKG share register for some time, and we welcome their further investment in the company. This agreement provides more options for payment of drilling invoices and will assist in the rapid recommencement of drilling on our flagship Napié Project.
“We look forward to strengthening our ongoing relationship with Geodrill, which should be beneficial to all Mako stakeholders.”
For further information please visit: https://www.makogold.com.au/
