Deccan Gold Mines Ltd., the first private sector gold exploration company in India, announced that the company has signed a memorandum of understanding or MoU with JB Mining Holdings Ltd.Hong Kong, for mining exploration in North East Africa.

As per MoU, Deccan Gold Mines Ltd. scope of work includes carrying out the entire gold exploration, resource estimation and planning for feasibility studies to facilitate mining activities for projects held by JB in the Republic of Djibouti, North East Africa. JB has entered into a joint venture with the Government of Republic of Djibouti to undertake gold exploration activities in certain mineral prospects in Djibouti.

The blocks that have been allocated for the proposed exploration are Hesdaba, Asaleyta, Garrabayis and V.GPS41 respectively. The area covered by each one of these four prospect blocks is 100 sq., kms., the company said.

The exploration strategy for the aforesaid gold prospects would include remote sensing studies, geological mapping, systematic channel sampling, followed by planning of boreholes and core drilling, core logging and analysis of cores and fire assay for gold and silver.

JB proposes will incorporate a special purpose vehicle in an off shore jurisdiction. The JV facility shall be primarily responsible for execution of the projects in Djibouti.

JB has appointed DGML as the Project Manager to carry out the entire exploration work and ascertain feasibility of the projects to commence commercial production.

As per terms, DGML shall be entitled to a professional fee, equivalent to 10% of the total operational and management cost of the project over and above getting reimbursed for all its direct and indirect costs in under-taking its role as Project Manager.

Further, DGML would get free carried equity in the JV company, equivalent to 5% of JB’s equity stake in the JV. Further, DGML has the right to acquire additional 20% stake in the JV at a 50% discount to the market value of the project. DGML plans to exercise this right should exploration activities result in the successful discovery of mineable deposits.

At the BSE, Deccan Gold closed Monday’s trading at Rs.31.40, up by Re.0.70 or 2.28% on volume of around 60K shares.

Find More Other News : Company, Exploration, Gold Mine, Mine Trade & Market, Mining Finance, Mining Investment, Mining Top News