An agreement has been reached between Sikaman Gold Resources (TSE) and Canadian Magnesite Mines whereby the latter may acquire a 20% equity interest in a 517-sq-km gold concession in Mali, West Africa.
The concession will be explored and developed with three other companies on a joint venture basis: Billiton B.V., which will act as the operator, Equatorial Gold Mine and a private Quebec company, Victory Exploration.
Sickaman has an option agreement with Victory to earn a 99% interest in the concession; the agreement calls for expenditures of $750,000 in the first year and $1.5 million in the second year. Victory will retain a 1% carried interest plus a 4.5% net smelter return from all production.
Exploration and development of the area is governed by a 30-year convention negotiated with the Mali government in January. Features of the convention include a 5-year corporate tax holiday, a 7% net smelter return to the government, no restriction on repatriation of funds and an exemption from payment of duties and taxes on imported equipment and materials.
The area acquired in Mali contains numerous known alluvial, eluvial and auriferous quartz vein structures, several of which are being developed by village workers, Sikaman President A.T. Griffis reports. (Griffis is also president of Canadian Magnesite.)
The joint venture group will begin field activities this month. The program will include considerable surface exploration as well as diamond drilling of two surface targets which had been previously identified as regions of known mineralization.
Sikaman and Billiton are currently active in another West African nation, Ghana.
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