Birim finds suitable suitor

Sidestepping a takeover bid by Golden Star Resources (GSC-T), junior Birim Goldfields (BGI-T) has signed a deal with Ghana-based Ashanti Goldfields (ASL-N) concerning Birim’s Mampon deposit, part of the Dunkwa property in Ghana.

Golden Star’s failed takeover followed the termination, last February, of a joint-venture agreement between Birim and Battle Mountain Gold (BMC-T). Under that agreement, Birim had full ownership of the oxide portion of the Mampon gold deposit, from which a small number of reverse-circulation (RC) holes had returned only modest gold values. At the time of termination, Battle Mountain had spent US$4.5 million on exploration.

On its own, and armed with $700,000 from a spring financing, Birim carried out a 28-hole, 1,718-metre RC program drilled on 25-metre centres into the upper 85 metres of Mampon. The drilling covered a strike length of 250 metres with fences positioned on either side of the original discovery line.

Highlights include:

• 46 metres grading 15.37 grams gold per tonne in hole R68;
• 20 metres of 16.66 grams gold in hole R70; and
• 45 metres of 16.61 grams gold in hole R71;

Golden Star was attracted to the new shallow high-grade gold intersections at Dunkwa, and, looking to secure more feed for its newly acquired Bogoso gold mine and mill in Ghana, launched its takeover bid for Birim.

Golden Star offered half a share for each Birim share, valuing the latter at about $8 million, or 38 cents per share. The deal was contingent on the tendering of at least two-thirds of Birim’s 21.2 million outstanding shares.

However, Birim, with only $300,000 in cash and equivalents, had been talking with other interested parties as well.

In the latest Mampon deal, Ashanti can acquire a 100% interest in a 40-sq.-km area, which includes all known mineralization in the Mampon deposit area, for US$500,000 and an advanced royalty payable to Birim. The royalty will range from US$10 to $30 per oz., depending on the amount of gold recovered. Independent estimates place Mampon’s resource at 600,000 oz., with about 175,000 oz. grading 5 grams gold per tonne amenable to open-pit extraction.

Birim will also receive US20 cents per oz. for each US$1 increase in the price of gold between US$300 and $350 per oz.

In a related private placement, Ashanti will buy US$500,000 of Birim treasury shares at 30 cents (Canadian) per share, and Birim will issue US$500,000 worth of 3-year convertible debentures. As a result, Ashanti will be able to buy additional Birim shares at 45 cents (Canadian) per share.

The deal will inject US$1.5 million into Birim.