AFRICA — Etruscan raises Samira funds

A US$3.5-million loan from a South African bank will enable Etruscan Resources (EET-T) to complete a feasibility study at its Samira gold project in Niger.

The study, which was begun in September 1998, focuses on the oxides of the Samira deposit. Those resources were last pegged at 6.4 million tonnes grading 2.49 grams gold per tonne but are expected to rise following the discovery of an extension (T.N.M, Dec. 7-13/98).

In return, the bank will receive seven short-term exchange capital units worth US$3.5 million. Each unit can be converted into Etruscan shares six months after the deal closes, and will bear interest at the London Inter-Bank Offer Rate plus 2.5% per annum. The units will remain outstanding for up to three years.

The offer is subject to due diligence (partly complete) and regulatory approval.

According to a prefeasibility study, the current oxide resource can support an open-pit, heap-leach operation at the rate of 3,300 tonnes per day, or 70,000-80,000 oz. gold per year. Startup costs are estimated at US$12 million, with cash costs expected to average US$150 per oz. over a mine life of eight years.

Structurally controlled gold mineralization occurs as disseminations in sedimentary rocks sandwiched between greenstones. Mineralization is oxidized, and altered to saprolite, to a depth exceeding 100 metres. Deeper than that, mineralization occurs in fresh rock in association with sulphide minerals (predominantly pyrite and arsenopyrite).

Samira was discovered in the early 1990s during a government-sponsored program of regional mapping and prospecting. Etruscan acquired the property in 1996, dealing an option to Placer Dome (PDG-T). Placer managed and operated the exploration work until it dropped the option last summer.

Since then, Etruscan has been discussing a possible joint venture with a subsidiary of Anglo American (ANGLY-Q).