Aim-listed Lexington Gold has announced that the prospecting right owned by Jelani Resources has now been formally renewed until May 29, 2026.
This follows on the back of announcements made on May 15 and September 7 last year regarding Lexington’s acquisition of White Rivers Exploration (WRE).
The company said on May 13 that the renewal of the Jelani Resources prospecting right was a milestone for the issue of about 25.8-million deferred consideration shares in respect of the company's acquisition of WRE.
As such, about 19.3-million new common shares are being issued to Mark Creasy and 6.4-million new common shares to Sunswell Holdings.
Further to the issue of the initial deferred consideration shares, Creasy and his nominees will own about 53.2-million common shares, representing about 13.35% of Lexington’s enlarged issued share capital.
Freefire Technology, which is one of Sunswell's nominees, will own about 15.2-million common shares representing about 3.82% of the company's enlarged issued share capital.
"We are pleased to announce the successful renewal of the Jelani Resources prospecting right and associated issue of the initial tranche of deferred consideration shares linked to the achievement of this key milestone," Lexington Gold nonexecutive chairperson Ed Nealon said.
The shareholders of Jelani Resources are Lorraine Gold Mines and Avgold, which are both subsidiaries of JSE-listed Harmony Gold, at a collective 35%, while WRE holds the balance of 65%.
The Jelani Resources prospecting right covers an area adjacent to Harmony's Target mine in the north-western portion of the Welkom Goldfields in South Africa.
In 2018, WRE established an independently estimated gold resource estimate attributable to the Jelani Resources project, but such estimation has not yet been formally verified or accepted by the shareholders of Jelani Resources.
Although not independently audited, the resource estimate comprised 6.02-million ounces of gold, of which about 2.95-million ounces would potentially be attributable to WRE if all the Jelani project hurdles are ultimately achieved, including successful feasibility studies, a decision to mine being made by Jelani Resources' shareholders and WRE choosing to participate in the funding of future development costs to retain a 49% interest in Jelani Resources.
The estimated mineral resources within a 1 km buffer zone are attributable solely to Harmony.
Harmony has indicated that Jelani Resources will, subject to the successful completion of a bankable feasibility study in due course, be afforded the opportunity to mine the mineral resources in such buffer zone provided that a decision to mine has been taken, commercial terms have been agreed between the parties and approval from the board of directors of Harmony has been obtained.