(Ecofin Agency) - Gold miner Avocet Mining with operations in West Africa has entered a conditional joint-venture (JV) agreement with Moroccan firm Managem to develop its Tri-K project in Guinea.

“We have been looking to raise financing for the Tri-K project for some time during a difficult period for the mining sector as a whole as well as for Guinea in particular (including the ebola crisis), and we are therefore delighted to confirm that this project is now able to move forwards,” said David Cather, Chief Executive Officer of Avocet Mining PLC.

Under the terms of the agreement, Managem will first acquire a minority stake (40%) in the project for $4 million which will be used to repay debt and for general working capital purposes. After this, Avocet will transfer the entity that holds its interests in the project and exploration permits in the JV which is called Manacet SA.

Next, the Moroccan group will get a majority stake (60%) in the project by investing $10 million in drilling, analysis and documentation in 12 months to facilitate an anticipated increase in the Ore Reserves and completion of a Bankable Feasibility Study (“BFS”) within 24 months. Once these objectives are attained, Managem’s interest in the project will increase to 70%. Otherwise, it will remain at 60%.

Once BFS is completed, the two firms will work together to finance the construction of the project which should be completed, and production should start within 42 months following ratification of the Mining Convention by the Guinean parliament.

Tri-K is a project in the northeast Guinea with a total mineral resource of 3 million ounces. Feasibility study for the project indicated a maiden ore reserve of 480,000 ounces (7.9 million tons grading 1.89 g/t). Mining permit for the project was awarded Avocet in March 2015.

Louis-Nino Kansoun