Turaco Gold's (ASX:TCG) agreement to acquire an exploration permit which will strengthen its Afema gold project in the Sefwi greenstone belt at Ivory Coast made "commercial sense", Euroz Hartleys said in a Dec.9 note.
The gold explorer announced that it signed an agreement with Pioneer Minerals SARL to secure acquisition rights of 366 square kilometers of exploration permit adjacent to its Afema gold project.
The exploration permit is under application and acquiring it will expand the company's total project area by 30%.
Turaco has secured the exclusivity following an upfront payment of $75,000, the note said.
It has also secured a 12-month option to acquire the exploration permit for $100,000.
During this period, the company will conduct stream and soil geochemical sampling to assess the permit's potential.
Turaco may exercise the option at any time by issuing 2.25 million shares and granting a 2% net smelter return (NSR) royalty.
"Adding highly prospective but under-explored tenure to its main Afema project area makes commercial sense," Euroz Hartley said.
Euroz maintained Turaco Gold's speculative buy rating.
The company's shares slid 2% at market close.
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