SearchGold Signs Joint Venture Agreement With Swala Resources PLC on Arae-Gassel Property in Burkina Faso
May 05 2009 - 9:00AM
Marketwired
SearchGold Resources Inc. ("SearchGold") (TSX VENTURE:
RSG)(FRANKFURT: S1O) is pleased to announce that it has entered
into an joint venture agreement ("Agreement") dated April 22nd
2009, with Swala Resources PLC ("Swala") on the Arae-Gassel Gold
Property ("Arae-Gassel") located in northern Burkina Faso, West
Africa.
The Arae-Gassel property is directly adjoining on its southern
boundary Wega Mining's Belahouro property, host of the 1.4 million
ounce Inata gold deposit (5.2 million tonnes @ 2.3 g/t Au for
378,480 ounces of Measured Resources and 19.8 million tonnes @ 1.6
g/t Au for 1,018,450 ounces of Indicated Resources). Mineralization
at Inata is hosted in a northeast trending shear zone which extends
onto the Arae-Gassel property, where the Kerboule-Yalema shear zone
has been traced over a 5 km strike length in 1999 by previous
operator Orezone Resources Inc.
The objective of this Agreement is to concomitantly develop the
small scale mining potential of the property while insuring the
execution of a proper exploration program to evaluate the potential
for the identification of a larger scale gold deposit.
Swala can acquire an interest of up to 65% in the Arae-Gassel
property over five years by meeting the following conditions:
- By paying SearchGold a total of US$ 300,000 in four
installments:
- US$ 150,000 upon signature
- US$ 50,000 on the first anniversary date
- US$ 50,000 on the second anniversary date
- US$ 50,000 on the third anniversary date
- By executing a Phase 1 exploration program comprising notably
1,000 m of drilling and the construction of a pilot plant with the
objective to test the metallurgical process and produce a first
1,000 ounces of gold. Once Phase 1 is duly executed and the first
1,000 ounces of gold have been produced, Swala will have acquired a
40% interest in the project. While Swala may take up to two years
from the date of signature of the Agreement for the execution of
Phase 1, Swala undertakes to execute the necessary balance of
exploration expenditures to comply with the SearchGold-Somika
agreement (see press release dated October 22nd 2008) which
foresees total development expenditures of US$ 750,000 on the
Arae-Gassel property prior to September 18th 2009.
- By executing a Phase 2 development program consisting in a
small-scale mechanised mining and treatment operation and by
concomitantly undertaking a Phase 2 exploration program with the
objective to identify one or several gold deposits totalling
800,000 to 1,200,000 ounces of gold in the measured and indicated
categories on the Arae-Gassel property. If warranted by the results
of Phase 2, Swala will execute a National Instrument 43-101
compliant pre-feasibility study ("PFS") within three years of the
date of signature of the Agreement. Once the PFS is completed,
Swala will have acquired an additional 11% interest in the project
for a total of 51%.
- Following the acquisition of a 51% interest, Swala may pursue
the development of the project by executing a National Instrument
43-101 compliant bankable feasibility study ("BFS") within five
years of the date of signature of the Agreement. Once the BFS is
completed, Swala will have acquired an additional 14% interest in
the project for a total of 65%.
In addition, upon its acquisition of a 40% interest, and
provided that SearchGold has not succeeded by that date in raising
funds in the total amount of C$500,000 since the signature of the
Agreement, Swala will subscribe for SearchGold common shares in the
amount of C$150,000 at the market price. Swala may substitute any
third party to make such subscription.
Swala will be project operator and a technical committee will be
established to overview the development work to be executed on the
property. This technical committee shall be composed of two members
appointed by Swala and two members appointed by SearchGold. Swala
will provide in-depth metallurgical know-how adapted to small scale
mining operations in Africa. Having acquired a strong geological
expertise for gold in West Africa, SearchGold will contribute to
the geological development of the property through an active
participation at the level of the project team conducting the work
on the property.
Revenue achieved on any and all production from the pilot plant
will be allocated in priority to comply with all regulatory and
administrative obligations as well as to reimburse Swala fully of
all pilot plant expenditures, any advances by Swala to the Phase 2
development expenditures and potential investments by Swala in
SearchGold. The balance of the revenue shall be utilised for annual
distribution to SearchGold and Swala, to a maximum extent of 10%
for each Party (totalling 20%) of the net revenue after operating
costs and funds allocated to the Phase 2 exploration
expenditures.
Swala is a private, British-based, mining company involved in
the acquisition and development of mining projects with a focus on
gold and various metals in Africa. It is managed by a team of well
respected mining professionals combining a long established
association with major mining house Anglo-American and experience
in setting up, developing and listing resource-focused
companies.
Philippe Giaro, President and CEO, stated "We are extremely
pleased to be working with Swala on this project. Our common
approach is truly innovative in that both fundamental aspects of
mining and exploration will be tackled simultaneously in a
progressive fashion with the underlying principle that development
of the property should be financially self-sustainable. This
approach is especially appropriate given that venture capital
market have virtually dried up during the current crisis rendering
access to exploration capital more difficult as well as slowing
project financing for the more advanced projects. This agreement
will truly speed up the development of the Arae-Gassel property and
fully unlock its geological potential.".
West Africa, and specifically Burkina Faso, is recognized for
its gold potential. High River Gold Mines Ltd. commenced production
from the Taparko gold deposit in July 2007 and three more recently
outlined gold deposits are Etruscan Resources Inc.'s Youga deposit;
Semafo Inc.'s Mana deposit and Wega Mining Inc.'s Inata deposit.
Furthermore, other historically renowned regions, such as the Poura
mine, produced over 800,000 ounces of gold confirming the country's
potential.
About SearchGold Resources Inc.
SearchGold Resources is a Canadian-based mining company
primarily focussed on gold deposits in Africa. Shares of SearchGold
Resources Inc. are listed for trading on the TSX Venture Exchange
as "RSG"; and the Frankfurt Stock Exchange as "S1O".
Neither 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.
Contacts: SearchGold Resources Inc. Philippe Giaro, President
& CEO 32-473-52-30-29 phgiaro@skynet.be SearchGold Resources
Inc. Denis Tremblay, Vice-President 1-514-866-4224
info@searchgold.ca www.searchgold.ca CHF Investor Relations Alison
Tullis, Senior Account Manager 1-416-868-1079 x 233
alison@chfir.com
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