The president and CEO of Asante, Mr. Douglas MacQuarrie, is also Managing Director of Goknet. Asante Gold has appointed two independent directors to act as a Special Committee to oversee this transaction. The price is set at $ 22.5 million, which seems quite fair if you consider that cash flow streams on this royalty will commence in 2014 of $ 3.8 million a year, which corresponds to a price of 6 times the cash flow. However, the price is paid in shares, with a deemed price of $ 0.50. In total thus 45 million shares will have to be issued. This makes Goknet the largest shareholder on Asante Gold, with 45 million shares of 75 million total shares fully diluted, or roughly 60%. In fact Goknet is buying itself in into Asante's Fahiakoba project in Ghana and is paying a premium of 150% as the price per share before the press release was only $ 0.19.
So what we now have is a company with 75 million fully diluted shares at $0.24, or a market cap of $ 18 million, with a positive cash stream of $ 3.8 million a year to continue exploration without further dilution on a project with one big supporting shareholder who strongly believes in this project as he is willing to pay a premium of 150% for a participation of only 60%.