Akiko negotiating joint venture

If all goes as planned, Akiko-Lori Gold Resources (VSE) and three associated companies expect to announce shortly the formation of a Canadian joint venture with Gold Fields Canadian Mining.

Akiko-Lori, Omega Gold (VSE), Koala Resources (VSE) and Golden Pyramid Resources (VSE) are negotiating an agreement with Gold Fields which would involve certain Canadian property interests under the control of the associated companies.

This includes a substantial land package in northwestern British Columbia, and if a deal is realized, it would represent Gold Fields’ first significant venture into the province.

“I see this as an endorsement of British Columbia’s mineral potential that should be noticed at an international level,” said Akiko-Lori President Michael Levinson. “And I’m delighted at the prospect of working with Gold Fields, one of the best gold mining companies in the world.”

If an agreement is reached, the joint venture would be administered under an “umbrella” agreement that allows Gold Fields to earn a 50% beneficial interest in each property subject to the agreement. Gold Fields will have the right to act as operator within designated project areas, and the right to resolve management committee deadlocks.

The joint venture would be annually renewable by Gold Fields for a 20-year period, with cash payments to Akiko-Lori of $250,000 per year for the first 10 years, and $350,000 per year for the second 10-year period.

Gold Fields would also have the right of first refusal on all current projects held by Akiko-Lori, Omega and Golden Pyramid and on land acquired by all the associated companies in the future.

The properties subject to the agreement will first be categorized by the parties taking into account geologic potential, work conducted, access and proximity to other venture activities or proven reserves.

For example, Gold Fields would have to spend $500,000 over four years to earn a 50% interest in category one properties; $1.5 million over five years to earn 50% of category two properties; and $4 million over five years to earn 50% of category three properties. Under the terms of the agreement, Gold Fields would have the right to conduct a due diligence review to confirm, among other things, that all underlying property agreements are in good standing and all payments and work obligations have been performed.

Because of widespread claim disputes in northwestern British Columbia, some of which affect claims held by some of the associated companies, Gold Fields’ due diligence review will also examine whether claims have been properly staked and whether title to such claims is acceptable.