Hope Bay eyes French Guiana gold assets

Hope Bay Gold (HGC-T), through a wholly owned French subsidiary, has signed a deal to buy Asarco’s subsidiary in French Guiana, Asarco Guyane Franaise (AGF).

AGF holds the Camp Caiman gold project, along with the Matarani exploration permit in eastern French Guiana. Another exploration permit in the area is pending.

The agreement calls for Hope Bay to pay US$16.4 million in instalments from closing of the deal and wrapping up 120 days after the start of commercial production at Camp Caiman. AGF would retain a 1.5 % net smelters return royalty on any production from the Matarani and Cipanama permits, up to a maximum of US$2 million. The royalty excludes Camp Caiman.

The agreement is subject to full technical and financial due diligence, completion of a financing by Ariane, and approval by French authorities and other regulators.

Ariane Gold Corp., a Hope Bay spin-off with the purpose of holding all of its French Guiana assets plans on a rights offering after its parent distributes all of the subsidiary’s outstanding shares to Hope Bay shareholders.

Hope Bay’s chairman and CEO David Fennell said, “the purchase of Camp Caiman when added to our existing properties in French Guiana will create a company with an advanced development project and significant exploration potential.”

To date, AGF has spent about US$15.8 million sinking some 39,000 metres of diamond drill holes plus more than 20,000 meters of reverse circulation holes. The company has also completed extensive metallurgical testwork, environmental monitoring and permitting, and initial prefeasibility work. The result is the identification of two orebodies at Caiman, Scout and C-88.

At last report (June 2001), measured and indicated resources at Camp Caiman stood at 18 million tonnes grading 3.3 grams gold per tonne for 1.9 million contained ounces of gold. The calculation is based on a cutoff grade of 1 gram gold per tonne. Of the total, just less than 7.2 million tonnes running 3.1 grams gold is contained in saprolite (oxide) material. Another 10.8 million tonnes of 3.3 grams is found in sulphide material. About 82% of the resource tonnage is classified as measured.

Hope Bay intends to increase both the oxide and sulphide resources via: an infill drilling program focused on the existing zones; drill testing along strike of known orebodies, and exploration of already identified surface gold anomalies on the Camp Caiman permit. So far, just 20% of the anomalies have seen been tested.

Initially, Hope Bay plans to focus their efforts on development of the oxide resources. Planned is a US$3-million in fill and extension drilling program. This will be followed by an updated resource estimation and a subsequent feasibility study of the oxide resources alone.

The sulphide portion of the property’s resources will undergo further metallurgical and resource definition work before being incorporated into any feasibility study.

The company also plans to continue exploring its nearby properties with the aim of providing additional oxide ore to Camp Caiman.

Partnered at the Hope Bay gold project in Nunavut since 1999 when they acquired the project from Australian-based BHP for US$18.5 million, Hope bay and Miramar Mining (MAE-T) recently announced plans to combine the two companies via a share-swap deal based on a share exchange ratio of 0.263 of a Miramar share for one Hope Bay Gold share. The combination deal will not include Hope Bay’s assets in French Guiana, and is subject to regulatory, required shareholder and court approvals.

Phoenix-based Asarco is a subsidiary of Grupo Mexico.