Following Takeover Of Parent Company, Pasofino Inks Cooperation Deal With Investors, Calls It "Rebirth" Of West African Gold Project

Pasofino Gold Limited EFRGF, a Canada-based mineral exploration company with mining operations in Liberia – a West African country with significant gold reserves and a government actively courting investments for mining and refining – has entered into a cooperation deal with Hummingbird Resources PLC., which owns 50.8% of the company and Nioko Resources, the West African investment firm. 

The deal includes a board reconstitution, which requires that the board be made up of three  Hummingbird Resources nominees and three board nominees from Pasofino including CEO Brett Richards, Krisztian Toth and Emre Kayışoğlu. The cooperation agreement also calls for the termination of Pasofino's shareholder rights plan. It is aimed at giving a boost to Pasofino's Dugbe Gold Project, which is the company's gold mining project in southern Liberia. 

Pasofino's Gold Mining Gets A Boost

Dugbe Gold Project is within what the company says is one of the last remaining underexplored parts of the Birimian geological province, which is host to the majority of West African gold deposits. This part of the Birimian has a growing gold endowment, and Pasofino has a ground holding of  2,078 km, reports the company. Pasofino, through its wholly-owned subsidiary ARX Resources Limited, owns 100% of the Dugbe Gold Project. A mineral development agreement issued by the government of Liberia for the project secures mining rights and terms for 25 years for the company. 

“This co-operation 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," says Pasofino’s Chief Executive Officer Brett Richards. "In this current and forecasted gold environment, and given the 2022 dated Feasibility Study, we are going to quickly engage the necessary resources to update all aspects of the study 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 eighteen  months from the signing of the agreement." 

To say gold is in demand is an understatement. Gold has been surging for several years now, hitting multiple all-time highs over the past year alone. The recent global economic turmoil suggests it may increase further – so much so that Deutsche Bank just raised its average gold price forecasts in 2025 and 2026 to $3,139 and $3,700 per ounce respectively. The Wall Street bank pointed to recent economic and geopolitical developments globally for the upgrade of its forecast.

Fundraising To Commence 

Under terms of the  co-operation agreement, Hummingbird and Pasofino agreed that for the remainder of calendar year 2025, Pasofino will seek to raise funds to update the Dugbe Gold Project feasibility study in Liberia and to commence certain pre-construction activities such as infrastructure development and initial site preparation. 

Pasofino expects to raise about $10 million in 2025 and $15 million in 2026  to prepare the project for a construction decision. Meanwhile, Hummingbird said it plans to participate pro rata in the financings as the lead order. The three agreed that Pasofino would terminate its current strategic review process which was announced in March. The deal also calls for Pasofino to complete a revised feasibility study within 12 months and agree to a standstill period until October 31, 2026. During that time Pasofino won't pursue other strategic options. Dugbe Gold Project has 2.76Moz in reserves, a 3.5-year capex payback period once in production and a 14-year life of mine at a low AISC profile, reports Pasofino. 

"With the co-operation Agreement in place and under the leadership of Pasofino’s CEO, Brett Richards, together with the support of Nioko (Hummingbird's controlling shareholder), Pasofino can now move forward for the benefit of all shareholders and emerge from what has been a static number of years development wise. This should represent a turning point in the company’s future for the benefit of all shareholders,” said board member Stephen Dattels  who is resigning from the company to focus on a fund he co-founded in January 2025. 

Deal Set In Motion In March 

The cooperation deal was set in motion in March when  Pasofino alerted shareholders to the acquisition by Nioko Resources of control of Hummingbird Resources pursuant to the exercise of a subscription option that was completed on January 7, 2025. 

As a result of the acquisition and a cash offer by Nioko to the shareholders of Hummingbird, Hummingbird stopped trading publicly in March. Pasofino had viewed that transaction as an indirect take-over bid and the cooperation inked in early April is the next evolution of that transaction. 

Pasofino's CEO Richards said in March he wasn't surprised by Nioko's interest given it had already seen strong interest in the Dugbe Gold Project by third parties in recent months including discussions on partnerships, potential acquisitions and attractive project financing. 

"Given the quality of the project and the stable and supportive jurisdiction in which the company operates, the board believes that the current market valuation of Pasofino is significantly undervalued and it is apparent from the interest and preliminary offers received from bona fide suitors that we need to structure a process that realizes maximum value for our shareholders,” Richards said back then. 

Featured image courtesy of Pasofino Gold.

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