/NOT FOR DISSEMINATION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES/ TSX Venture Symbol: DAU
TORONTO, Oct. 5, 2011 /CNW/ - Further to its press release of June
21, 2011, Desert Gold Ventures Inc. (the "Company" or "Desert
Gold") is pleased to provide the following update with respect to
its proposed acquisition (the "Acquisition") from TransAfrika
Resources Cyprus Limited (the "Vendor") of all of the outstanding
shares of TransAfrika Belgique S.A. ("TransAfrika"), a private
Belgian company which owns interests in three advanced
exploration-stage gold deposits in central and western Africa
through subsidiaries in Rwanda, Mali and Senegal. Closing of
Subscription Receipt Financing Effective October 4, 2011, the
Company successfully closed a private placement (the "Financing")
of 4,949,665 subscription receipts at a price of $0.75 per
subscription receipt for aggregate gross proceeds of $3,712,250.
The Company engaged MGI Securities Inc. ("MGI") as agent in
connection with the Financing. The gross proceeds of the Financing,
less certain costs and expenses of MGI, will be held in trust by
Computershare Trust Company of Canada ("Computershare"), as
subscription receipt agent, and released to the Company upon
completion of the Acquisition (the "Effective Date") pursuant to
the terms of a subscription receipt indenture entered into between
the Corporation, MGI and Computershare. These funds, combined with
existing cash on hand, will enable the Company to satisfy the first
phase of TransAfrika's work program and fulfill its working capital
obligations under the terms of the definitive sale of shares
agreement entered into with the Vendor and TransAfrika in respect
of the Acquisition (the "Share Exchange Agreement"). On the
Effective Date, each subscription receipt will automatically
convert into one unit (a "Unit") of the Company, with each such
Unit consisting of one common share and half of one common share
purchase warrant. Each whole warrant will entitle the holder
to acquire one additional common share of the Company at an
exercise price of $1.00 for a period of 24 months following the
Effective Date, provided that, in the event that the closing price
of the outstanding common shares on the TSX Venture Exchange
("TSXV") is greater than $1.50 for a period of 20 consecutive
trading days at any time following the Effective Date, the Company
may, at its option, accelerate the expiry date of the warrants by
giving written notice to the holders thereof and in such case the
warrants will expire on the date which is the earlier of: (i) the
30(th) day after the date on which such notice is given by the
Company; and (ii) 24 months from the Effective Date. In its
capacity as agent, MGI received a work fee in the amount of $56,500
(including HST) and 49,496 broker warrants, each being exercisable,
commencing upon the Effective Date and for a period of 18 months
thereafter, into one Unit at an exercise price of $0.75. All
securities issuable in the Financing will be subject to a statutory
four-month hold period. Filings with TSX Venture Exchange and
Anticipated Timing On September 22, 2011, the Company submitted its
draft filing statement to the TSXV in respect of the
Acquisition. Subject to, inter alia, receipt of all necessary
regulatory (including TSXV) approvals, the Company expects to
formally close the Acquisition by mid-November, 2011. To the extent
that the TSXV determines that the Acquisition requires the approval
of the Company's shareholders, the Company will, in an effort to
eliminate the additional cost and delay associated with calling a
special meeting of its shareholders, seek to obtain shareholder
approval of the Acquisition by way of written consents from
shareholders holding a majority of the outstanding Company shares,
in accordance with TSXV policies. Please refer to the Company's
press release of June 21, 2011 (available at www.sedar.com) for
further details concerning the Acquisition. Amendment to Share
Exchange Agreement On August 17, 2011, the Share Exchange Agreement
was amended to provide as follows: -- The Vendor agreed to provide
up to $750,000 to TransAfrika in the form of a non-interest bearing
loan in order to enable TransAfrika to advance and maintain the
subject mineral properties during the period prior to closing of
the Acquisition. Upon successful completion of the Acquisition,
Desert Gold will be obligated to assume and repay any sums so
advanced (to a maximum of $750,000), provided that that if the
Acquisition is not completed for any reason, Desert Gold will be
under no obligation to assume or repay all or any part of such
interim financing. -- In light of recent market conditions, the
parties agreed to reduce the requirement for cash on hand upon
completion of the Acquisition from $10,000,000 to $5,000,000.
Following the successful completion of the Financing, the Company
expects to have at least $5,000,000 in available cash upon closing
and, on this basis, will be able to fund all aspects of the
recommended Phase I work programs on TransAfrika's properties.
Following completion of the Acquisition and depending on market
conditions, the Company may consider raising additional equity in
order to fund the further advancement of the TransAfrika properties
and, potentially, to finance accretive acquisitions of adjacent
properties. Ayub Khan, Chairman and CEO of Desert Gold, commented:
"We are very pleased that the Company was able to successfully
complete the Financing in light of such challenging market
conditions. We are equally pleased to have forged such a
positive working relationship with our partners at
TransAfrika. Desert Gold believes strongly in the potential
of TransAfrika's western African gold assets and looks forward to
completing the Acquisition and continuing the exciting exploration
and development work being done in western Africa." About
TransAfrika Belgique S.A. TransAfrika has acquired a portfolio of
advanced mineral projects in Central and West Africa the most
important of which include: Rwanda: TransAfrika, through its
wholly owned subsidiary TransAfrika Rwanda Gold Ltd., has acquired
100% ownership of two exploration permits in the two main gold
domains in Rwanda. These include permit No 107/16.03/05
issued on 13 November 2007 covering 90,119 hectares ("ha") (Byumba)
and 7,044 ha (Rusizi), and permit No 0040/16.03/05 issued on 1
September 2008 covering 14,754 ha (Nyamugali) and 684 ha (Rusizi
Extension). The exploration permits lie within the Central African
Kibaran Orogen stretching from Katanga, Democratic Republic of
Congo, into Uganda. The Kibaran hosts Banro's Twangiza,
Namoya, Lugushwa and Kamitunga deposits with a total resource of
10.5 million ounces of gold ("Au"). Whilst Rwanda hosts a number of
coltan, tin and tungsten mines as well as small artisanal gold
mines, TransAfrika's Byumba Project is the first significant gold
resource discovered in the country. These properties
currently represent early stage exploration targets. The
Byumba Project is located in the Gicumbi District in the Northern
Province of the Republic of Rwanda. A diamond drilling program,
comprising 33 holes for 5,183 m was carried out between July 2008
and August 2009 by TransAfrika on the Byumba Project and an
inferred resource of 5,551 kt at a grade of 1.48 g/t for 257,000
ounces Au was declared for the Rubaya deposit. Mineralization is of
the disseminated type and occurs in 14 parallel higher grade zones
within a broad mineralized zone of up to 80 m wide and is expected
to be amenable to open pit mining. Drilling tested the
mineralization over a strike of 1,160 m. The Rubaya deposit
is open down dip and along strike and has yet to be fully
delineated. The next phase of drilling is intended to increase the
resource. To date TransAfrika has spent USD $7.6 million in
exploration expenses in respect of its properties in Rwanda.
Mali: TransAfrika, through its subsidiaries and joint venture
agreements, has three exploration permits (EP) focused on gold in
Mali. The permits in Mali are held by TransAfrika Mali SA, a joint
venture company incorporated in Mali held 74% by TransAfrika and
13% by each of the two joint venture partners. The permits include
Farabantourou, PR08/3549 covering 112 km(2), Loulo-Est, PR 08/349
covering 52 km(2) and Segala-Ouest, PR 09/396 covering 16
km(2). The permits are underlain by Birimien
volcano-sedimentary formations of the Kenieba inlier. Several
gold mines occur within the Kenieba inlier, including Loulo,
Sadiola, Yatela, Tabakoto, Segala and Sabodala. Realization
of the importance of the Birimian rocks as the major source of gold
in West Africa led to a series of discoveries and mine development
over the last two decades in the West African countries of Ghana,
Ivory Coast, Guinea Mali and Burkino Faso, leading to Ghana and
Mali becoming the second and third largest producers of gold in
Africa. The Senegal-Mali Fault Zone ("SMFZ") straddles the
Farabantourou permit. Mines associated with the SMFZ include
Loulo (11.5 million ounce gold resource) and Sadiola (9.2 million
ounce gold resource). The Loulo-Est and Segala Ouest permits
are adjacent to the Segala/Tabakoto Mines (3.32 million ounce gold
resource) of Avion Gold Corp., a TSXV issuer, with gold
mineralization extending from the Segala Mine onto the Segala Ouest
permit. All of these mines are open pit operations with
underground potential. The TransAfrika permits have potential
to host similar deposits. Since acquiring the permits, TransAfrika
has conducted exploration work on these permits including soil
sampling, trenching, auger drilling, IP surveys, reverse
circulation ("RC") drilling and diamond drilling. On Loulo-Est,
TransAfrika drilled 60 RC holes and 12 diamond drill holes on soil
anomalies for a total of 8,224 m. 29 of the holes intersected more
than 1 g/t Au. Intersections include values of up to 21 g/t Au over
1 m and intersection widths of up to 7 m at 1.95 g/t Au. Between
2001 and 2003, 823 RC holes were drilled on Frabantourou for a
total of 53,139 m. This drilling program was a follow-up on
targets identified by geochemical surveys, aeromagnetic surveys and
artisanal workings. Gold mineralization was discovered in six
areas; Barani, Barani East, Keniegoulou, Dambamba, Kousilli and
Linnguekoto. Significant mineral intercepts include 4 m at 9.31 g/t
Au and 6m at 7.90 g/t Au at Barani East, 4 m at 5.90 g/t Au and 20
m at 1.62g/t Au at Keniegoulou, 7 m at 2.04 g/t Au and 12 m at 1.88
g/t Au at Dambamba and 4 m at 6.16g/t Au at Kousilli. Further
TransAfrika drilling gave values of 1.26 g/t over 18 m. Since
2008 TransAfrika spent a total of USD $5.4 million in exploration
expenses in respect of its properties in Mali. Senegal:
TransAfrika through its subsidiary TAR Senegal SA has acquired the
Souroundou gold exploration permit with an area of 299.33 km(2 )in
eastern Senegal on the Falémé river on the border with Mali.
The geological setting is similar to that of the Malian
permits. The permit is immediately north of and adjacent to
the exploration permit area held by Mineral Deposits Limited which
operates the Sabodala Mine. Exploration work carried out up until
May 2010 included a soil geochemical covering the south-western
part of the permit (a total of 1,612 soil samples were collected),
hard rock grab sampling of outcrops in areas of anomalous soil
values, and an IP survey over areas with anomalous gold in soil
values. To date TransAfrika has spent a total of USD $347,000
in exploration expenses in respect of its properties in Senegal. NI
43-101 technical reports have been completed for all projects in
Rwanda, Mali and Senegal and were prepared by Coffey Mining, an
independent geological consulting firm. The authors Mark McKinney,
Janine Flemming and Kathleen Body are Qualified Persons as defined
by NI 43-101 for the purposes of this news release. Copies of
the technical reports will be available on SEDAR following review
and approval by the TSX-V. About Desert Gold Ventures Inc. Desert
Gold Ventures Inc. is an advanced exploration and development
company which holds a 50% participating interest in a joint venture
agreement with Kinross Goldbanks Mining Company (a subsidiary of
Kinross Gold Corporation) of Toronto, Ontario in respect of the
Goldbanks Mining property located in Pershing County, Nevada, USA.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in the United
States. The securities have not been and will not be
registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act") or any state securities laws
and may not be offered or sold within the United States or to U.S.
Persons unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such
registration is available. All dollars in this release are in
Canadian funds. Completion of the transaction is subject to a
number of conditions, including TSXV acceptance. The transaction
cannot close until the required shareholder approval is obtained.
There can be no assurance that the transaction will be completed as
proposed or at all. Investors are cautioned that, except as
disclosed in a Filing Statement prepared in connection with the
transaction, any information released or received with respect to
the Proposed Transaction may not be accurate or complete and should
not be relied upon. Trading in the securities of Desert Gold should
be considered highly speculative. NEITHER THE TSX VENTURE EXCHANGE
NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN
THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY
FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE. FORWARD-LOOKING
STATEMENTS This press release includes certain "forward-looking
statements". All statements regarding the ability of the
Company to successfully complete the Acquisition, to successfully
integrate the businesses of Desert Gold and TransAfrika and to
delineate new resources in proposed drilling programs are
forward-looking statements that involve various risks and
uncertainties. There can be no assurance that such statements
will prove to be accurate and actual results and future events
could differ materially from those anticipated in such
statements. All statements that are not historical facts,
including without limitation statements regarding future estimates,
plans, objectives, assumptions or expectations of future
performance, are "forward-looking statements". We caution you
that such "forward looking statements" involve known and unknown
risks and uncertainties that could cause actual results and future
events to differ materially from those anticipated in such
statements. Such risks and uncertainties include the
inability of the Company to close the Acquisition and the
concurrent financing due to the state of the capital markets and
other factors, including those risk factors discussed in the
Company's filings with Canadian securities regulatory
agencies. The Company expressly disclaims any obligation to
update any forward-looking statements except as may be required by
law. Desert Gold Ventures Inc. CONTACT: Jared Scharf, Chief
Financial OfficerTel. (416) 662-3971e-mail:
jared.schard@desertgold.caFor further information on Desert Gold
Ventures Inc. please visit ourwebsite at: www.desertgold.ca
Copyright
Common Shares (TSXV:DAU)
Historical Stock Chart
From Jun 2024 to Jul 2024
Common Shares (TSXV:DAU)
Historical Stock Chart
From Jul 2023 to Jul 2024