Eyeing a bigger slice of the promising Bissa project in Burkina Faso,
High River is offering 0.75 of a share for every Jilbey share. The exchange rate values Jilbey shares at $1.02 apiece — a 29% premium to Jilbey’s closing price of 79 on June 17, the business day prior to the announcement of the deal.
Jilbey’s directors have approved the transaction and intend to put it before shareholders in August. Regulatory approval is also required.
High River already holds a 29% stake in Jilbey and has agreed to finance exploration of its properties. The companies are already partnered under an agreement that gives High River back-in and operatorship rights on gold discoveries found within trucking distance (less than 100 km) of the Taparko mill. High River also has the right of first refusal on discoveries outside trucking distance.
The Bissa project is part of Jilbey’s 5,300-sq.-km land package in Burkina Faso’s prospective greenstone belts; it lies outside of trucking distance to Taparko. Measured and indicated resources total 1.4 million tonnes grading 3.33 grams gold, based on a cutoff of 0.5 gram gold. An additional 106,000 tonnes grading 2.89 grams are classified as inferred.
Mineralization at Bissa has been traced over 5.5 km along the 30-km-long Sabce shear zone. The company is following up on several significant geochemical anomalies identified along the remainder of the zone.
The latest batch of reverse-circulation (RC) drill holes at Bissa targeted the Bissa Southwest zone and the Bissa Extension deposit. Highlights include 37.5 grams gold over 4 metres, 17.9 grams over 8 metres, and 10 grams over 4 metres. The company has since moved a second drill rig on to the property.
An updated resource estimate is expected by year-end.
Jilbey is earning a 70% interest in the 900-sq.-km Bissa Hill and Zandkom permits by completing a feasibility study of the properties. The ground is optioned from GEP Mines, a private company in Bur-kina Faso.
Jilbey also holds various interests in several gold, base metal, and diamond prospects in Canada.
High River’s holdings in Burkina Faso measure 2,300 sq. km, and include the Taparko-Bouroum gold project, which is slated for production in early 2006. The operation is expected initially to produce 100,000 oz. gold per year, ramping up to 140,000 oz. in the third year. Reserves total 7.6 million tonnes averaging 2.9 grams gold per tonne.
High River holds an 80% interest in Taparko, with the remainder held by the government of Burkina Faso. Three-quarters of the government’s interest is carried.
Elsewhere in the country, High River continues to drill the Labola gold property, where an initial round of reconnaissance drilling recently turned up some narrow, high-grade intervals.
Labola comprises three sub-parallel mineralized quartz vein structures, dubbed the Central zone, with another sub-parallel zone 2.5 km to the east. The veins strike 11 km within a 300-metre-wide deformation corridor. So far, drilling indicates the zones vary from a few metres up to 80 metres in width.
Previously, 110 samples of quartz vein material derived from waste piles at artisanal mining sites returned an average of 5.4 grams gold per tonne, with a maximum of 72.6 grams. Fifty-two samples of host rock averaged 0.8 gram gold.
The recent drill program comprised 18 RC holes totalling 1,604 metres and 1,628 metres of rotary-air-blast (RAB) drilling along one fence. The holes were designed to test the Labola shear structure at 500-metre intervals over 11 km.
The campaign’s best result came in hole 4, which cut 2 metres (from 74 metres below surface) averaging 32.9 grams gold, including 1 metre of 65.2 grams. The hole was sunk at the southern end of the main Central zone.
Some 4.3 km to the north, hole 14 yielded 1 metre (from 81 metres) of 52 grams gold, plus a 4-metre interval higher in the hole returned 2.9 grams gold. Other high-grade values from the Central zone include:
– hole 10 — 2 metres (from 54 metres) of 20.7 grams, and 1 metre (from 80 metres) of 12.8 grams;
– hole 12 — 2 metres (from 56 metres) of 23.6 grams, including 1 metre of 46.2 grams; and
– hole 13 — 5 metres (from 32 metres) of 7.1 grams gold.
High River says the results indicate the potential for broad low-grade mineralization accompanying high-grade shoots. Among the values encountered by hole 10 are 6 metres of 2.5 grams, 10 metres of 1 gram, and 11 metres at 1.9 gram. Hole 13 also encountered a 40-to-50-metre-wide zone of quartz veining containing 5 metres of 7.1 grams, with each 1-metre sample yielding 1.5 grams, 11.4 grams, 11.2 grams, 6.7 grams and 4.6 grams.
Visible gold was observed in nine of the 18 RC holes.
Meanwhile, a fence of 48 inclined RAB holes drilled across the middle of a 1.6-km gap between artisanal gold workings on the Central zone cut the trace of one of the two central quartz vein structures. Hole 43 yielded 6 metres grading 0.42 gram gold. The company believes the shallow RAB drilling may not have reached the targeted quartz vein system as the area corresponds to a topographic low.
Three RC holes on the southern side of the gap returned a best interval of 1 metre (from 45 metres) grading 7.4 grams gold in hole 2; the remaining intervals generally measure 1-2 metres and grade 1-2 grams gold.
Meanwhile, hole 16, the lone hole to test the easternmost structure, encountered two high-grade quartz veins 15 metres apart and returned 2 metres (from 71 metres down-hole) grading 32 grams gold, and 1 metre (from 51 metres) of 8.4 grams. The hole also returned visible gold. So far the structure has been traced over 1 km.
The company plans further induced-polarization and magnetic surveys to follow up on an IP survey that outlined a strong chargeability and resistivity response over the Central zone’s mineralization and indicated the presence of additional similar structures on a 1-sq.-km section of the Central zone.
Also planned are geological mapping, soil geochemical sampling and geophysical surveys in anticipation of a second phase of drilling.
High River’s other interests include an 84.9% stake in Russian gold producer OJSC Buryatzoloto and a 99% interest in the Berezitovy project in southern Siberia (the state property fund in the Amurskaya region owns 1%).
Reserves at Berezitovy stand at 13.9 million tonnes grading 2.3 grams gold and 11.7 grams silver. The US$59-million operation is expected to churn out 100,000 oz. gold per year over nine years at a total cash cost of US$192 per oz. The first gold pour is expected in the first half of 2006.
In other news, High River recently sold 3 million shares of
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