Volta Resources (VTR-T) plans to turn much of its focus to the newly acquired Kiaka gold project in Burkina Faso and the market has given its nod of approval; shares have risen about 27% in two days to 42¢ apiece.
Volta has signed an agreement with Randgold Resources (RRS-L, GOLD-Q) to buy the Kiaka project (subject to a free participating right of 10% up to a full feasibility study held by a local company) for $4 million in cash and 20 million Volta shares.
Volta president and CEO, Kevin Bullock, says he had to do a lot of shopping before he could secure a deal.
“To get the deal over the goal line is quite difficult, within our type of market cap, so it was very fortunate of us to be able to do a deal with Randgold,” Bullock says.
The near-surface deposit does not have any National Instrument 43-101 resources but Randgold has what it calls a “geological resource” of 81.58 million tonnes grading 1.01 grams gold per tonne for 2.65 million oz. gold.
Mineralization has been detected as deep as 300 metres on the deposit, which is about 750 metres long and 150 metres wide. It’s a part of a 244-sq.-km property.
Metallurgical test work done by Randgold has shown recoveries between 80% and 98%.
Volta plans to spend $4 million drilling 17,000-20,000 metres over the next few months. The company hopes to put out a resource estimate within 6-9 months.
Volta was formed when two juniors, Birim Goldfields and Goldcrest Resources, merged in early 2008. Volta has a market cap of $22.6 million.
“One of the purposes of merging was to get a company of size to acquire an asset that was further advanced than we currently owned,” Bullock says. “We looked at quite a few projects and finally came up with Kiaka as the one we thought would be a company-maker.”
The company recently announced a $5 million bought deal financing, which has the option of being increased to $9 million. Right now, Volta has $3 million in the bank.
In the next six months or so, Volta plans to spend another $2.5 million on its other projects in West Africa.
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