Lexington Gold (LSE: LEX) is focused on the exploration and development of its gold projects in
- Witwatersrand gold fields projects in South Africa held via White Rivers Exploration acquired in September 2023 (see announcement dated 7 September 2023) ; and
- Four diverse gold projects in North and South Carolina, USA , covering a combined area of over 1,500 acres acquired in November 2020.
The Witwatersrand gold fields projects in South Africa are held via White Rivers Exploration which was acquired in September 2023.
Witwatersrand gold fields projects
The North and South Carolina projects are situated in the highly prospective Carolina Super Terrane (“CST”), which has seen significant historic gold production and is host to a number of multi-million-ounce mines operated by majors and was also the site of the first US gold rush in the early 1800s, before gold was discovered in California.
Jones Keystone & Loflin Projects (JKL)
Highlights of the North and South Carolina projects
- The four GAR Projects are situated in the highly prospective Carolina Super Terrane, which has seen significant historic gold production yet with limited modern exploration;
- The region is also host to a number of multi-million-ounce mines with similar geology to the GAR Projects, operated by third party majors;
- The Carolinas represent a developed and stable jurisdiction, with modern local infrastructure and ready access to operational resources;
- The strong prevailing gold market environment makes the potential of the GAR Projects particularly attractive;
- Excellent Board and management team with significant mining and, in particular, gold mining experience; and
- Strong local joint venture partner in Uwharrie Resources Inc., which has significant local knowledge and expertise and, in particular, knowledge relating to the local geology and GAR Project areas.
Minimum Funding Requirements
For the Company to retain its 51%. membership interests in the GAR Projects, it has to make certain Minimum Funding Contributions in respect of each of the projects in each of the four years and throughout the four year period following admission to the aggregate sum of AU$5 million (Initial Minimum Funding Contribution Period). We continue to have excellent relations with our joint venture partner, Uwharrie Resources Inc, and have agreed with them an extension of three months to the original Initial Minimum Funding Contribution Period in which we are due to meet the Minimum Funding Contributions detailed below:
| AU$ | |||||
| Minimum | Minimum | Minimum | Minimum | ||
| Project | Total | Year 1 | Year 2 | Year 3 | Year 4 |
| JKL | 1,500,000 | 250,000 | 150,000 | 150,000 | 150,000 |
| Carolina Belle | 1,500,000 | 250,000 | 100,000 | 100,000 | 100,000 |
| Jennings-Pioneer | 1,000,000 | 100,000 | 100,000 | 100,000 | 100,000 |
| Argo | 1,000,000 | 100,000 | 100,000 | 100,000 | 100,000 |
| 5,000,000 | 700,000 | 450,000 | 450,000 | 450,000 |
In the event that the Minimum Funding Contributions are not satisfied by the Company, Uwharrie Resources Inc., the Company’s joint venture partner, has the option to acquire the Company’s 51% interest in the relevant project for a nominal sum of AU$1.
At the end of the three month extended Initial Minimum Funding Contribution Period and the satisfaction of the Minimum Funding Contributions, the Company will have the option to increase its interest to 80% by meeting Further Funding Contributions in years 5 and 6, should Uwharrie Resources inc. elect not to fund its proportionate share of future costs.
A breakdown of the Further Funding Contributions is detailed below:
| AU$ | |||
| Minimum | Minimum | ||
| Project | Total | Year 5 | Year 6 |
| JKL | 2,500,000 | 150,000 | 150,000 |
| Carolina Belle | 2,500,000 | 100,000 | 100,000 |
| Jennings-Pioneer | 1,500,000 | 100,000 | 100,000 |
| Argo | 1,500,000 | 100,000 | 100,000 |
| 8,000,000 | 450,000 | 450,000 |
If the Company does not make the Further Funding Contributions in years 5 and 6, it will retain its 51% interest in the GAR Projects.