Dear Desert Gold Shareholder:
On November 30, 2011, Desert Gold Ventures Inc. (TSX VENTURE:DAU) ("Desert Gold"
or "we") completed the acquisition (the "Acquisition") 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.
The Acquisition has refocused the company into primarily developing its
promising West African and Rwanda permits to proven resource status and develop
those properties to mining operations, in a socially and environmentally
responsible manner. The Company is very excited to have acquired such highly
prospective gold properties, particularly in Mali and Rwanda, the latter having
a 43-101 compliant(1) inferred mineral resource of 5,551,000 tons at a grade of
1.48 Au g/t for 265,000 oz of gold.
Desert Gold also continues to own a 50% interest in the Goldbanks Project
located in Nevada, USA, under the terms of a joint venture agreement entered
into with a wholly-owned subsidiary of Kinross Gold Corporation
(TSX:K)(NYSE:KGC) which has a 43-101 compliant inferred resource of 28,310,000
tons at a grade of 0.57 Au g/t for 556,000 oz of gold.
In light of these recent developments, the Company would like to provide our
shareholders with a brief update on Desert Gold, our current objectives as a
company, and the leadership group in place to ensure that we achieve our goals.
Share Capital
Immediately prior to the Acquisition, Desert Gold had 19,118,370 common shares
outstanding. As consideration for the Acquisition, Desert Gold issued a total of
20,000,000 common shares to TransAfrika Resources (Mauritius) Limited
("TransAfrika Mauritius") as ultimate parent company of TransAfrika, 10,000,000
of which are being distributed, by way of dividend, to the TransAfrika Mauritius
shareholders pro rata to their shareholdings in TransAfrika Mauritius(2).
(1) SAMREC stands for the South African Code for Reporting of Exploration
Results, Mineral Resources and Mineral Reserves. As more particularly described
in the technical reports filed with the TSX Venture Exchange and other
regulatory authorities and available under Desert Gold's SEDAR profile at
www.sedar.com, the mineral resource categories of the SAMREC Code reported above
reconcile with the same mineral resource categories in the Canadian Institute of
Mining, Metallurgy and Petroleum ("CIM") Definition Standards adopted by the CIM
Council and incorporated into National Instrument 43-101 - Standards of
Disclosure for Mineral Projects of the Canadian Securities Administrators.
(2) TransAfrika Mauritius is a widely-held private company that has raised over
$40 million in financing since 2007 principally to fund the advancement of the
TransAfrika material properties recently acquired by Desert Gold. TransAfrika
Mauritius also owns interests in base metals properties in the DRC and
Mauritania which did not form part of the Acquisition.
Desert Gold is required to issue a further 12,000,000 common shares (the
"Performance Shares"), in the aggregate, to TransAfrika Mauritius and its
shareholders in the event that within a two year period from closing of the
Acquisition, Desert Gold publishes an NI 43-101-compliant resource calculation
disclosing that the TransAfrika material properties contain at least an
additional 1,000,000 ounces of gold or gold equivalent in the inferred mineral
resource category.
In addition, concurrent with the Acquisition, Desert Gold raised $3.7 million
through the issue of 4,949,665 units at a subscription price of $0.75 per unit
(the "Financing"). Each unit consisted of one common share and one-half of one
common share purchase warrant, with each whole warrant entitling the holder to
subscribe for one additional common at an exercise price of $1.00 for a period
of 24 months from closing of the Acquisition, provided that, in the event that
the closing price of the Desert Gold common shares on the TSX Venture Exchange
is greater than $1.50 for a period of 20 consecutive trading days at any time
following closing of the Acquisition, Desert Gold 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 30th day after the date on which such notice is given; and (ii) 24
months from closing of the Acquisition.
Overall, a total of 44,038,035 common shares, 2,474,832 warrants, 2,051,625
stock options, and 49,496 broker warrants (issued to MGI Securities Inc. as lead
agent in connection with the Financing) are currently outstanding.
Board and Management
----------------------------------------------------------------------------
Name, Municipality of
Residence, Position with
Desert Gold Selected Biographical Information
----------------------------------------------------------------------------
Roeland van Kerckhoven Mr. van Kerckhoven has spent more than 29
(Bryanston, South Africa) years of his career with the Anglo American
President, Chief Executive group of companies, serving for the last 15
Officer and Director years as CFO and business development director
of Anglo Platinum until he retired in March
2007.At various times during his career at
Anglo Platinum, he also headed the;
exploration, legal, corporate finance,
investor relations and corporate
communications portfolios. Since joining
TransAfrika Mauritius in 2008 as President and
Chief Executive Officer, he has overseen the
discovery and evaluation of a portfolio of
assets and has been actively involved in
negotiations with African governments and
joint venture partners. He earned both his MBL
and B.Comm degrees from the University of
South Africa.
----------------------------------------------------------------------------
Theo Christodoulou Mr. Christodoulou worked at
(Johannesburg, South Africa) PricewaterhouseCoopers for nearly 5 years,
Director after which he joined Deutsche Bank. He worked
for the bank for 11 years, which included 5
years as Director (and head of Metals and
Mining in South Africa). Mr. Christodoulou
then founded the corporate finance company, AC
Squared Solutions in 2010. He has extensive
experience in advising on mining initiatives,
project finance planning and management, M&A,
IPO's and BEE structuring across Africa. Mr.
Christodoulou holds an MBA from Duke
University.
----------------------------------------------------------------------------
Louw van Schalkwyk Mr. Schalkwyk started his career as an
(Northern Cape, South exploration geologist with Gold Fields of
Africa) South Africa Limited in 1984 and was promoted
Vice-President, Exploration, to senior geologist. In 1992 he moved to
Director consulting and contracting geology, working on
gold and base metal exploration for various
major and junior exploration and mining
companies in sub-Saharan Africa. These include
Rio Tinto Plc, Anglo American, Iscor Limited
and Pangea Minerals Ltd. His ability to
integrate geology with applied exploration
techniques led to the discovery of the Gams
East Zinc deposit while working as project
manager for Anglo American. Mr. Schalkwyk
obtained a BSc Geology (Hons) degree from the
University of Stellenbosch in 1984.
----------------------------------------------------------------------------
Jared Scharf Mr. Scharf has been serving as CFO of Desert
(Ontario, Canada) Gold since 2009. Mr. Scharf's background is in
Chief Financial Officer, private investment and management consulting
Secretary in the areas of corporate finance and
financial accounting. Over the last 7 years
Mr. Scharf has focused much of his time on the
acquisition and development of mining and
alternative energy projects in Africa and
North and Central America. Mr. Scharf is also
a Director of EasyMed Services Inc., a
publicly-traded Canadian healthcare technology
company. Mr. Scharf holds an Honors Commerce
degree in Finance from the Telfer School of
Management at the University of Ottawa as well
as a Bachelors of Administration also from the
University of Ottawa.
----------------------------------------------------------------------------
Mohd Ayub Khan Mr. Khan brings over 19 years of experience in
(Geneva, Switzerland) operations, public markets and finance to the
Non-Executive Chairman of Resulting Issuer. Over the last 19 years he
the Board of Directors has been involved in acquiring, restructuring
and financing public companies. His experience
in public markets includes acquisitions of
companies in Europe and South America. Mr.
Khan is a professional Asset Manager currently
based in Geneva, Switzerland and travels
extensively in order to oversee his company's
considerable business interests. Mr. Khan
holds a B.Sc. in Business Administration and
Finance from Ball State University of Muncie,
Indiana, U.S.A.
----------------------------------------------------------------------------
Thomas R. Tough Mr. Tough has more than 40 years experience as
(British Columbia, Canada) a self-employed consulting Professional
Director Engineer in 40 different countries, in both
the western and eastern hemispheres. In the
course of his career he has been involved in
many capacities of the mining industry. He has
held numerous directorships and officer
positions in public and private companies,
including the role of President, CEO and
Director of Desert Sun Mining Corp. for 18
years. In April 2006, Yamana Gold Inc.
purchased Desert Sun and its producing gold
mine in Brazil. In 2003 Mr. Tough also joined
the boards of TSX listed Potash One Inc.,
where he also served as President and CEO, and
TSXV listed Maxtech Ventures Inc., where he
still serves as President & CEO. Since 2008 he
has served on the board of Aroway Minerals
Inc. and in 2010 he became President, CEO and
a director of Firebird Resources Inc., both
listed on the TSXV. He is a member of the
Association of Professional Engineers and
Geoscientists of British Columbia and holds a
B.Sc. in Geology from the University of
British Columbia.
----------------------------------------------------------------------------
Sonny Janda He is the President & CEO of Grand Peak
(British Columbia, Canada) Capital Corp., a TSXV listed company that
Director invests in public and private corporations. He
also serves on the board of Maxtech Ventures
Inc., Lucky Minerals Inc. and EasyMed Services
Inc. He holds a bachelor's degree in Economics
from Simon Fraser University in Vancouver, BC.
----------------------------------------------------------------------------
Exploration Programs
Desert Gold is in the process of carrying out a $5 million exploration program
in respect of the Rwanda and Mali properties, as recommended by Coffey
International Limited, authors of the independent technical reports (the
"Technical Reports") filed with the TSX Venture Exchange and other regulatory
authorities and available in their entirety under Desert Gold's SEDAR profile at
www.sedar.com.
Coffey International Limited is a specialist professional services consultancy
with expertise in geosciences, international development, and project
management. Coffey is listed on the Australian Securities Exchange (ASX:COF).
Set forth below, for your reference, are excerpts from the Technical Reports
summarizing the proposed 2012 work programs at the Rwanda and Mali projects:
Rwanda
Work completed by TransAfrika on its Rwanda permits thus far has been largely
focused on the Byumba Project with soil sampling surveys carried out on the
Rusizi and Nyamugali Projects. The recommended exploration priority is to
increase and improve the mineral resource for the Byumba Project.
The total budget required for Rwanda is USD 3,200,000 as presented in Table 1
below. At the completion of the diamond drilling a decision will be taken on
commencing a Scoping Study based on the drill results returned.
----------------------------------------------------------------------------
Table 1
Bumba, Nyamugali and Rusizi Project
Estimated Exploration Budget. (USD '000s)
----------------------------------------------------------------------------
Item Total
----------------------------------------------------------------------------
Drilling $1,929
----------------------------------------------------------------------------
Logistics and equipment $239
----------------------------------------------------------------------------
Consulting and salaries $430
----------------------------------------------------------------------------
Laboratories $227
----------------------------------------------------------------------------
Kigali and Johannesburg office $375
----------------------------------------------------------------------------
TOTAL $3,200
----------------------------------------------------------------------------
The scheduling of the exploration is presented in Table 2 and the associated
costing in Table 3.
Coffey Mining considers the exploration rationale to be appropriate for this
stage of the projects. Additional funding may be required at a later stage.
----------------------------------------------------------------------------
Table 2
Summary of Work Schedules by Permit Area
----------------------------------------------------------------------------
Q3 Q4 Q1 Q2
Permit 2011 2011 2012 2012
----------------------------------------------------------------------------
Rusizi Limited work
recommended
----------------------------------------------------------------------------
Byumba Establishment, Diamond Diamond Modelling and
rig drilling, soil drilling, resource
mobilization, sampling Metallurgical estimate
construct drill test work
platforms,
Diamond drilling
----------------------------------------------------------------------------
Nyamugali Target Public liaison,
generation Mapping
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Table 3
Summary of the proposed Spending of the Exploration Budget for Rwanda
(USD)
----------------------------------------------------------------------------
Q3 Q4 Q1 Q2
Permit 2011 2011 2012 2012 Total
----------------------------------------------------------------------------
Corporate RSA &
Mali/Senegal $112,500 $112,500 $112,500 $37,500 $375,000
----------------------------------------------------------------------------
Logistics & Equipment $75,200 $75,800 $76,800 $11,600 $239,400
----------------------------------------------------------------------------
Field Teams & Technical
Consulting $112,600 $133,600 $148,600 $35,000 $429,800
----------------------------------------------------------------------------
Drilling & Geophysical
Contractors $226,400 $928,800 $774,000 $0 $1,929,200
----------------------------------------------------------------------------
Laboratories $30,200 $95,200 $98,800 $2,500 $226,700
----------------------------------------------------------------------------
Total $556,900 $1,345,900 $1,210,700 $86,600 $3,200,100
----------------------------------------------------------------------------
Mali
Farabantourou Permit
Farabantourou has an initial budget estimated to the end of Q2 2012 (Table 1).
Geological mapping should be carried out over the entire permit area with
emphasis on structural geology. Once the structure is better understood, drill
results from all known prospects should be reinterpreted. The soil-sampling grid
should be extended to cover the entire permit area.
All geological, geophysical and geochemical data should be integrated at the end
of phase 1 and drill targets prioritized. Should the assessment be positive a
drilling budget should be compiled to allow for drilling to start in Q4 2012.
The nature of the drill program will be determined by Phase I exploration
results.
The following phased exploration program is proposed:
Phase 1: Prioritization of areas for resource drilling, Phase I will include
site establishment, geological mapping, soil sampling, integration of geology IP
data and soil sampling data, trenching and pitting over selected areas and drill
planning.
The budget to completion of phase 1 is USD $576,100 (table 1)
Phase 2: Exploration drilling. This phase was not budgeted.
Phase 3: Resource drilling. This phase was not budgeted.
----------------------------------------------------------------------------
Table 1
Summary of Budget for Farabantourou Permit Area
(USD)
----------------------------------------------------------------------------
Q3 Q4 Q1 Q2
Permit 2011 2011 2012 2012 Total
----------------------------------------------------------------------------
Corporate RSA & Mali/Senegal $67,500 $67,500 $67,500 $67,500 $270,000
----------------------------------------------------------------------------
Logistics & Equipment $57,000 $30,300 $30,300 $10,800 $128,400
----------------------------------------------------------------------------
Field Teams & Technical
Consulting $36,400 $36,400 $36,400 $28,500 $137,700
----------------------------------------------------------------------------
Laboratories $15,500 $15,500 $9,000 $0 $40,000
----------------------------------------------------------------------------
Total $176,400 $149,700 $143,200 $106,800 $576,100
----------------------------------------------------------------------------
Loulo-Est and Segala-Ouest Permit
Loulo-Est and Segala-Ouest have a combined budget estimated to the end of Q2
2012 (Table 2). TransAfrika have applied to the Malian Government and were
successful in getting the two permits combined and they are considered one
project. The following phased work program is recommended:
Phase 1: Prioritization of areas for resource drilling. This will include:
-- Soil sampling should be extended to cover the whole of Segala-Ouest.
Soil sampling results should be reprocessed using geostatistical
estimation methods to identify gold anomalies and trends as this appears
to give better results than simpler contour methods.
-- Geological mapping of the permits
-- IP surveys
-- Pitting and trenching
-- Target generation. While various targets have been identified, this has
not been done on a fully integrated geological model for the area. A
fully integrated geological interpretation needs to be undertaken so
that the geology can be better understood and targets for follow-up
surface surveys can be better delineated.
-- Drill program planning.
The budget allows for USD $690,100 to complete this phase (Table 2).
Phase 2: Exploration drilling. The nature of the drilling depends on the results
of from Phase 1, hence this phase was not budgeted.
Phase 3: Resource drilling. The nature of the drilling depends on the results of
from the previous phases. This phase was not budgeted.
----------------------------------------------------------------------------
Table 2
Summary of Budget for Loulo-Est, Segala-Ouest Area
(USD)
----------------------------------------------------------------------------
Q3 Q4 Q1 Q2
2011 2011 2012 2012 Total
----------------------------------------------------------------------------
Corporate RSA & Mali $67,500 $67,500 $67,500 $67,500 $270,000
----------------------------------------------------------------------------
Logistics & Equipment $57,000 $30,300 $55,300 $10,800 $153,400
----------------------------------------------------------------------------
Field Teams & Technical
Consulting $36,400 $36,400 $126,400 $28,500 $227,700
----------------------------------------------------------------------------
Laboratories $15,000 $15,000 $9,000 $0 $39,000
----------------------------------------------------------------------------
Total $175,900 $149,200 $258,200 $106,800 $690,100
----------------------------------------------------------------------------
In light of challenging financial market conditions, Desert Gold is delighted to
have completed the Acquisition TransAfrika and the subsequent Financing. The
Company is committed to expanding and further proving the significant potential
of the TransAfrika mineral properties for the benefit of our shareholders. To
this end, the Company anticipates raising $10 million of additional funding
during the first half of this year to pursue the drilling program on
Farabantourou, our most prospective property in Mali. All the while, the Company
will continue its drilling program in Rwanda where we look to significantly
increase the current resource estimate in the short to medium term. At current
levels, management feels that the Company's share price is undervalued and we
will be undertaking a sustained marketing and investor awareness campaign to
increase exposure in the investor community. To our shareholders, we thank you
for your continued support as we look to meet our corporate milestones with the
aim of building a world-class gold company.
Sincerely yours,
Roeland van Kerckhoven, President and CEO
For further information concerning Desert Gold and the TransAfrika material
properties, please refer to Desert Gold's SEDAR profile at www.sedar.com.
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
