Canaco Resources Inc. (TSX VENTURE: CAN) is pleased to announce it has entered into a memorandum of understanding (MOU) with an arm’s length third party, a Chinese gold producer, to create a joint venture to develop Canaco’s Magambazi project in Tanzania.
Under the terms of the MOU, Canaco and the Chinese gold company will form a joint venture to develop and explore the Handeni project. Canaco’s initial contribution to the joint venture will be the Handeni property, including the Magambazi project and all rights and obligations within the Handeni property. The value of Canaco’s initial contribution will be determined by an independent valuation firm retained by both parties. The Chinese gold company may earn up to a 55% interest in the joint venture by funding 100% of the costs of the ongoing operations of the joint venture until the earn-in is complete.
Canaco President and CEO Andrew Lee Smith said, “We are very pleased to enter into this agreement for development of Magambazi. We believe this MOU will lead to a long and beneficial partnership with a Chinese gold producer. Their technical excellence and experience in mine development is expected to facilitate the advancement of the project, and we expect their financial contributions to the project will allow Canaco to focus on additional opportunities to create value for our shareholders in these challenging market conditions.”
The MOU is non-binding and subject to certain conditions including, but not limited to, the completion of due diligence, a positive economic evaluation, the entering into a definitive agreement, receipt of a mining license for the Magambazi project, and regulatory approval, including acceptance by the TSX Venture Exchange.