Ann: GOA Set to Increase Interest in Flagship Cra, page-4

re: Ann: GOA Set to Increase Interest in Flag... Ok first lets read the agreement one is it gives us cash flow to get this underway, second Kenai has up to 18months to take this up in the meantime we will have 100%.
I believe the main objective is to get the PNG project into full swing it might surprise a lot how big it is going to be.
I think this is a good move on behalf of the company and now it needs to report on whats in the ground and how big this project can be and this will show in the share price.


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Key terms of the Agreement are as follows;
1. Option arrangement where Kenai will loan GOA up to $3M interest free with Option to convert the Loan into 50% equity in Sao Chico within 18 months of the Agreement
2. Kenai to become Project Managers of GOAB
3. GOA will receive $1m as an up-front Loan advance for its working capital.
4. GOA to agree to on-lend to GOAB the remaining $2m of the Loan for exploration and development at Sao Chico. The remaining $2m of of the loan will be advanced by Kenai in 4 tranches of $500,000 each.
5. If Kenai exercises the option any amount of the remaining $2m not lent to GOA will be lent by Kenai to GOAB.
6. Kenai pays further $1M to GOA and $1M into the GOAB project to earn a further 25% interest. GOA may then elect to sell its remaining 25% interest to Kenai for cash or Kenai shares based on US$30/oz for defined mineral resource gold ounces plus US$60/oz for defined mineral reserve gold ounces at that time
7. On exercise of the Option, GOA to receive a 10% Net Profits Interest (NPI) for 5 years over Kenais 50% or 75% interest.
8. Loan repayable at 90 days notice if demanded by Kenai within 18 months of the Agreement and must be repaid within 2 years if Option is not exercised.
9. GOA may in certain circumstances at its election and subject to any shareholder approvals require Kenai to accept GOA shares in repayment of all or part of the Loan at the then prevailing market price.
Commenting on the transaction, independent director Mr Tom Fermanis said, The Joint Venture allows us to focus on our PNG assets, whilst having a partner with the expertise and local networks to expedite exploration and mine commissioning activities at Sao Chico.