The Investor Group can earn up to a 45% interest in Simba’s Guinea PSC with a total investment of US$6,500,000.
The principal commercial terms of the farmout states that Simba will receive US$700,000 for cost recovery, after execution of the LOI.
Upon completion of the definitive agreement(s), the investor group will spend $3,800,000 for an airborne FTG (Full Tensor Gravity Gradiometry) survey that will cover a minimum of 9,000 kms2. This total initial expenditure of $4,500,000 will earn the investor group a 25% interest in Simba’s Guinea PSC.
The investor group has the option to earn an additional 20% interest by carrying out a 2D seismic program with a minimum expenditure of US$2,000,000 to bring the blocks to drill ready status.
Upon completion and interpretation of seismic results, both parties mutually agree to either drill a first exploration well, with each party responsible for its own share of costs, or; to farmout the project to other third parties on mutually acceptable terms.
Robert Dinning president and CEO of Simba stated, "This LOI provides immediate recovery of expenses to Simba and accelerates the completion of an FTG airborne survey. The LOI also provides the Investor Group with an option to carry out additional seismic surveys to support the selection of specific drill targets in Guinea. Simba is off to a very positive start in 2014."
Completion of the farmout is subject to normal government approvals and any required receipt of acceptance for filing by the TSX Venture Exchange.
Simba is an onshore pan-African oil and gas explorer with assets in Kenya Guinea and Chad. The Investor Group includes some participants from a group that recently signed the Kenya farmout LOI with Simba.
