RiverFort Global Opportunities announced that it has entered into a conditional term sheet with Kodal Minerals to potentially acquire a 20% interest in Kodal's portfolio of gold assets in West Africa which range from early exploration to assets with mineral resources.

RGO is expecting to invest up to $1.25m as part of an overall $2.5m funding package, arranged by RiverFort Global Capital, for Kodal to fund the acquisition of the Fatou Gold project in Southern Mali as well as the development of Kodal's portfolio of gold assets.

RGO will initially advance $0.15m to Kodal before completing its due diligence and the execution of binding contracts and security arrangements for the proposed investment.  

Subject to satisfactory due diligence and legal agreements, RGO will then advance, in stages, a further $1.1m of funding to enable Kodal to develop its portfolio of gold assets. If RGO does not proceed with the investment, Kodal will repay the advanced $0.15m.

Kodal will seek to realise the value of its portfolio of gold assets by 31 October 2021. RGO can then elect for its funding to be repaid, converted into Kodal ordinary shares or into a 20% interest in the vehicle created to hold the Fatou Project and Kodal's other gold assets.

Kodal believes that the Fatou Project, which comprises two concessions, Fininko and Foutière, is complementary to its existing activities in southern Mali being 100km to the south of the town of Bougouni and only 30km to the west of the Nangalasso Gold Project. 

The Fatou Project is an advanced project with previous exploration defining preliminary mineral resource estimates. Kodal said the project has ‘excellent exploration prospects that are drill ready and have potential to expand the defined zones of gold mineralisation.’

Historic exploration by AngloGold Ashanti and Rockridge Capital Corp, a Canadian listed company, which explored the project from 2010 to 2014, previously identified a preliminary mineral resource estimate exceeding 350,000 ounces gold for the Fatou Main prospect.

RGO believes the investment will offer investors more direct exposure to a broader range of alternative assets at valuations that are often lower than levels available in the public markets.

"We are pleased to be gaining additional exposure to the gold sector as a follow-on investment to the funding that we provided earlier this year to Tanzanian Gold Corporation,” commented Phillip Haydn-Slater, Non-executive Chairman of RGO.

Shares in RiverFort Global Opportunities have recovered strongly from lows of 0.55p In March this year to open at 0.90p this morning following the announcement.

Reasons to Follow RGO

RiverFort Global Opportunities is an AIM-listed investment company focused on seeking to generate returns for shareholders through capital growth and income by way of dividends and provides equity-linked debt funding to public and private small cap growth companies.

In the six-month period to 30 June 2020, the company hailed “excellent” half-year results after substantially increasing investment activity despite the uncertainty as a result of COVID-19.  

The group described the six-month period to 30 June 2020 as “very busy” as it focused on recovering cash from investments to reduce the level of risk within its investment portfolio.  

RiverFort said this was managed successfully with investment activity since increasing substantially with the Company making a number of new investments during the period.  

During the period, RiverFort generated investment income of £0.77m from its investment portfolio, with this level of profit underpinned by strong cash generation from operations. 

Net asset value rose 7.2% over the period to £8.45m since the beginning of the year while the group’s net profit margin grew 73.9% with an operating cash flow margin of 72.1%. 

The company told investors last month that it was targeting a 7.5% gross yield for the financial year ending 31 December 2020, based on the Company's current market capitalisation, commencing with the payment of a gross interim dividend of 0.02 pence per share. 

Phillip Haydn-Slater, Non-executive Chairman commented, "This is a very significant step in the continued progression of the Company.  We hope that shareholders will be happy with the progress that the Company has made to date and we look forward to welcoming new investors seeking income as well as capital appreciation from their investments."