Etruscan intersects gold at Datambi

Etruscan Resources (EET-T) has announced results from its Datambi permit in northeastern Burkina Faso, even as Channel Resources (CHU-T) spurns a takeover bid.

Channel’s board announced it would “vigorously oppose” Etruscan’s offer of one share for every 4.5 shares of Channel even though Etruscan has locked up the 26% of Channel held by Viceroy Resources (VOY-T).

The results from the Datambi concession, near the border with Niger, indicate that the stratigraphic horizon that plays host

to Etruscan’s Samira gold deposit in Niger also has gold mineralization across the border in Burkina Faso.

The prospect, called Songori, was discovered by surface sampling and follwed up by shallow (1-metre) auger holes to sample saprolitic subsoils. Thus far, Songori has eight auger holes in it, all of which intersected gold mineralization. They define a gold zone about 70 km along strike, testing the prospect to a vertical depth of about 25 metres.

The mineralized intersections, which range from 4.5 to 33 metres, sport gold grades between 0.5 and 1.7 grams per tonne. The longer drill intersections, which occupy the core of the prospect, also include shorter intervals with grades of 1.6-3.6 grams.

Etruscan holds a 45% interest in BF Geo Min Mining Development, a Burkina-domiciled company that holds the concession. Etruscan, which bought its interest from companies owned by Etruscan directors, has an option to buy the remaining 55% of the company.

Etruscan is continuing its takeover bid for Channel Resources, another junior explorer active in Burkina Faso. The bid of one share of Etruscan for every 4.5 shares of Channel values Channel shares at 83 cents.

Channel’s board of directors has recommended rejection of the Etruscan offer, based on an opinion from investment house HSBC James Capel that the offer was too low. Ross Fitzpatrick, Channel’s chairman, said he thought it was “too early for Channel shareholders to sell out, or to trade their undervalued shares for what we believe are overvalued shares of Etruscan.” Placer Dome (PDG-T), which recently dropped its option on Etruscan’s Tiawa concession, which includes the Samira deposit, has subscribed for just under 1.5 million shares of Channel at 50 cents each.

Channel’s centrepiece is its Bombore concession, 80 km east of Ouagadougou, where it has a 45% working interest and a 10% carried interest. Solomon Resources (SRB-V) owns the rest but has agreed to deal its share to Etruscan if the takeover bid succeeds.

The First Target prospect at Bombore has an indicated resource of 35 million tonnes of oxidized material grading 1.1 grams gold. Channel had planned to go ahead with a preliminary feasibility study on the First Target, examining the economics of open-pit production from the oxide zone and heap leaching to extract the gold.

Fitzpatrick said he saw Channel shares as undervalued because the Bombore resource calculation was only recently made public and because junior gold stocks are “stale these days.” He also said the company had not been promoting itself because it subscribed to the “old school, that you have to create assets first, then talk about them.”