AfriOre pads its gold portfolio

Continuing its trek to become a gold producer, metal-explorer-turned-coal-miner AfriOre (AFO-T) has wrapped up two deals to gain interests in gold exploration projects in Mali and South Africa.

In Mali, the company has inked a joint venture deal to pick up a 60% stake in the Banankoro gold project near Kangaba, from New Gold Mali, a subsidiary of Paris-based Maurel & Prom.

To earn its stake, AfriOre must spend US$2.5 million on exploration or complete a bankable feasibility study within four years. AfriOre will act as project operator.

The government of Mali holds a statutory right to a 10% carried interest plus a subscription option for another 10% at the exploitation stage. If the government exercises its option, AfriOre can boost its stake by 3.75% under the same terms as the government.

The 144-sq.-km property is home to several geochemically-defined gold targets. NGM reports spending about US$3 million on the property mainly on the Bagama target. There, 25 reverse circulation and 14 diamond drill holes identified at least four sub-parallel, gold-bearing zones dipping at 60-70. The zones run from surface to a drilled depth of 120 metres over a strike length of 700 metres.

One of Bagama’s four zones contains a high-grade zone at depths between 70 and 120 metres, in the transition zone below saprolite. The zone runs up to 8 metres wide over a strike distance of about 200 metres. It remains open in all directions.

Recent drilling returned between 0.65 and 420.72 grams gold per tonne over widths between 1 and 8 metres. AfriOre plans to follow up with drilling aimed at extending the known mineralization at Bagama.

The company has also signed a joint venture agreement with African Pioneer Mining to earn a 51% interest in the advanced 53-sq.-km Dwaalboom gold project in South Africa.

AfriOre, who will manage the project, can earn its stake by spending C$700,000 on exploration or by completing a bankable feasibility study within two years. The company can up its interest level by 19% to 70% by pay African Pioneer another C$600,000.

Gold mineralization at Dwaalboom is hosted by carbonate and sulphide stockwork. The zone is defined by a semi-continuous gold and arsenic anomaly in soils. The zone has a strike length exceeding 5 km.

An in-house report by the property’s previous owner, Anglo American (AAUK-Q), pegged the zone’s inventory at 20.1 million tonnes grading 1.1 grams gold over a 14-25-metre width, based on 22,000 metres of drilling. Trial mining of 25,000 tonnes by the major returned an average grade of 1.89 grams gold. Initial carbon-in-leach metallurgical test work by Anglo indicated gold recoveries of between 87% and 92%.

AfriOre plans to upgrade Anglo’s study to determine the economic viability of the project. The company will look to define a higher-grade core and possibly extend the known mineralization.

Elsewhere in South Africa, AfriOre also holds the FSC gold project where further mineral rights are being assembled and a joint venture partner is being sought.

The company also has a five-year option to acquire a 100% interest in the Ndori project in Kenya for US$1 million. The property hosts several gold occurrences and previous gold mining operations. The company has applied for a prospecting license over another 1,514 sq. km in the area.

The company plans to use its existing coal operations (chief among them the Spring Lake colliery in South Africa) as a “cash cow” to provide funding for the acquisition and development of gold projects. The company is looking for: at least one gold project at or near production and economic at current gold prices; marginal gold projects with at least 1 million oz. gold and profitable at a gold price of around US$350 per oz.; and projects with the potential to host multi-million-ounce deposits.