Areva takes gold assets public

French nuclear fuel company Areva (ARVCF-O) has agreed to a reverse-takeover of Venture-listed La Mancha Resources (LMA-V, LACHF-O) that will move its gold assets into a Canadian-listed public company.

Under the agreement, Areva’s subsidiary, Compagnie Gnrale des Matires Nucleaires, transfers two other subsidiaries, Compagnie Minire Or (Cominor) and Mines & Resources Australia, to La Mancha in exchange for 90 million shares and 7 million warrants. The shares give Areva a 60% interest in La Mancha.

Cominor owns a 40% interest in the Hassai open-pit gold mine and heap-leach plant in northeastern Sudan, which produced 152,000 oz. gold in 2005 at a cash cost of US$250 per oz. Hassai, in which the Sudanese government owns a 56% interest and a private French concern the remainder, has about 2.3 million tonnes grading 5.3 grams gold per tonne in reserves.

Cominor also holds a 51% interest in the Ity and Flotouo-Zia gold mines in the western Ivory Coast, plus a large land package. Ity and Flotouo-Zia produced about 41,000 oz. gold in 2005 from lateritic and saprolitic material. The Ivorian government, through state enterprise Socit pour le Dveloppement Minire, owns the minority interest.

Mines & Resources is the 51% holder of two dormant gold mines about 20 km west of Kalgoorlie, Frog’s Leg (Mungari East) and White Foil (Mungari West). White Foil’s minority interest is held by Barrick Gold (ABX-T, ABX-N) thanks to its takeover of Placer Dome, which, in 2004, closed the open pit there that had formerly fed its Kundana mill. A measured and indicated resource of 5.7 million tonnes grading 2.2 grams gold per tonne remains at White Foil.

Frog’s Leg, in which Australian junior Dioro Exploration (DIORF-O, DIO-A) owns 49%, has a measured resource of 3.7 million tonnes grading 5.7 grams per tonne, and Mines & Resources plans to reopen it as an underground mine in late 2007.

Mines & Resources also holds a portfolio of exploration projects, mainly in Western Australia. La Mancha brings in four exploration properties in Argentina, including the Hualilan gold project in San Juan province; Hualilan has an indicated resource of 444,500 tonnes grading 14.6 grams gold per tonne and an inferred resource of 976,500 tonnes grading 13.4 grams per tonne.

To cash up the company, La Mancha is placing 26.9 million subscription receipts, convertible into the same number of shares. Just over a million will be privately placed in Canada, with the rest offered through Ocean Equities in London. La Mancha will put the deal to a vote of shareholders.