TSX-V-listed Pasofino Gold has entered into a binding term sheet for cooperation and support with its 50.8% shareholder, Hummingbird Resources, and its parent company Nioko Resources Corporation.

In terms of the agreement, the board of Pasofino has been reconstituted to comprise three nominees of Hummingbird – Oumar Toguyeni, Geoff Eyre and a person to be named later – and Pasofino CEO Brett Richards, Krisztian Toth and Emre Kayışoğlu, who were nominees of the board prior to the reconstitution.

Pasofino has committed to raise funds to update the Dugbe gold project feasibility study, in Liberia, and to start certain pre-construction activities, including initial site preparation and some infrastructure development. 

Pasofino envisions it will need $10-million for these activities to the end of the year, and about $15-million for 2026, to prepare the project for a construction decision.

The cooperation agreement states that Hummingbird will participate pro-rata in such financings as the lead order.

The agreement also involves Pasofino terminating its current strategic review process and, upon completion of a revised feasibility study on Dugbe within 12 months, the board will consider options in the best interest of the company and all shareholders – such as restarting the strategic review process of starting a financing plan to bring Dugbe into production.

Hummingbird CEO Eyre says the cooperation agreement establishes a solid foundation at the corporate level of Pasofino from which the Dugbe project can be advanced efficiently and in a disciplined manner. “Our joint funding commitments will help ensure further derisking of the project as we seek to realise the project’s full potential,” he adds.

“The Dugbe gold project remains a significantly undervalued gold asset in a favourable mining jurisdiction. While there has been interest expressed by various parties who recognised the quality and upside of the deposit, historical financial circumstances faced by Hummingbird have hindered efforts to realise shareholder value,” explains outgoing Pasofino board member Stephen Dattels.

Dattels has decided to resign from the board to pursue other interests, with Toth having been designated to replace Dattels on the board. Another Pasofino board member Robert Metcalfe also elected to resign following the cooperation agreement.

With the cooperation agreement in place and under the leadership of Richards, together with the support of Nioko, Pasofino can now move forward for the benefit of all shareholders and emerge from what has been a number of static years in terms of development.

“This should represent a turning point in the company’s future for the benefit of all shareholders,” Richards states.

He adds that the cooperation agreement represents a re-birth of the Dugbe gold project, now having a strong partnership, committed funding and a strategic direction to create transformational value for all shareholders.

“Given the current gold environment, we are going to quickly engage the necessary resources to update all aspects of the feasibility study, which was initially published in 2022, with respect to costs and gold price assumptions, as well as optimizing all processes to maximize recoveries and project economics.

“It is our intention to get the project to a construction decision within 18 months from the signing of the agreement,” Richards concludes.