ausdrill

Surprised there hasn't been a release on this yet...

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Gold company Azumah Resources (ASX:AZM) has entered into an innovative alliance with mining services company Ausdrill (ASX:ASL) whereby it will gain funding via a convertible note.

Ausdrill will invest $2 million in Azumah via a two year unsecured converting note which Ausdrill may convert into Azumah shares at $0.05 per share anytime prior to expiry.

Currently, the Azumah share price is $0.033.

Azumah is looking to develop the advanced the 2.2 million ounce Wa Gold Project, in north west Ghana which has a Measured and Indicated Resource of 1.4 million ounces grading 1.8 grams per tonne gold.

An update of the Feasibility Study and Mineral Reserves is underway following substantial Mineral Resource increases. The funds invested will be applied principally to the completion of the revised Study.

Under the alliance the parties have undertaken to work together on a collaborative and transparent basis to optimise the mining components of the Project.

Ausdrill is a leading Perth-based contract mining and services group with revenue of over A$1.1 billion in FY2013.

Azumah has the option to repay the note on expiry (if not converted by Ausdrill at $0.05) and pay periodic interest (8%pa) in cash or with new shares to be issued based on the Azumah share price at the time.

Azumah also has the right to require conversion prior to expiry at $0.05 if the 30 day volume average weighted price (VWAP) for Azumah shares is above $0.075.

If Ausdrill was to convert its note at $0.05, it would hold a 10% interest in Azumah making it the Company’s
largest single shareholder.

The alliance with Ausdrill follows the recent $1.0 million placement at $0.05 to Indian industrialist Agnivesh Argawal through his wholly owned Caitlyn Limited and together takes cash reserves for Azumah to $5.5 million.

http://www.proactiveinvestors.com.au/companies/news/52233/azumah-resources-strikes-2m-funding-deal-with-ausdrill-limited-52233.html