Anooraq drills Drenthe, eyes $20 million

Infill drilling by Anooraq Resources (ARQ-V) has halved the drill hole spacing on the central portion of the Drenthe farm on the northern limb of the Bushveld igneous complex in South Africa.

The recently completed drilling program included ten core holes totalling 2,176 metres, and was highlighted by:

• Hole 40 11.7 metres (from 26.3 metres below surface) grading 3.48 grams platinum, 2.69 grams palladium, and 0.28 gram gold per tonne. A 58.8-metre section beginning at 102.2 metres down hole returned 0.42 gram platinum, 0.52 gram palladium, and 0.11 gram gold;
• Hole 46 — 19.1 metres (from 92.7 m) running 1.81 grams platinum, 1.95 grams palladium, and 0.27 gram gold. The hole also encountered 5 metres (from 201.5 m) of 3 grams palladium, 3.21 grams platinum and 0.39 gram gold; and
• Hole 48 — 48.9 metres (from 74.8 m) averaging 1.03 grams platinum, 1.25 grams palladium, and 0.17 gram gold, a deeper 6-metre interval (from 143.4 m) runs 0.97 gram platinum, 1.2 gram palladium, and 0.17 gram gold.

In general, the remaining holes run between 1-3 grams combined platinum palladium and gold over widths from 1-25 metres; minor nickel and copper credits were also cut. Holes 40-43 were at a dip of 55 to the east; holes 44-50 were drilled vertically.

The holes are part of a new joint effort between Anooraq and Anglo American Platinum (AAPTY-Q) to explore for platinum group elements, gold and nickel on the northern limb of the fabled Bushveld igneous complex in South Africa.

Anglo Platinum chipped in the northern portion of its adjacent Overysel farm, and has committed to treat and dispose of PGE ore from any eventual operation at its recently completed smelter at Polokwane, 80 km east of Drenthe. Anooraq is also contributing its Witrivier farm, immediately to the northeast, should the Drenthe deposit extend there.

The two plan an extensive, multi-rig drill program for early 2004. Infill drilling will continue to target the Drenthe deposit, while delineation drilling will look to pin down the southern extent of the deposit on the Overysel farm.

At last count, inferred resources at Drenthe totalled 99.4 million tonnes grading 0.6 gram platinum, 0.63 gram palladium, 0.012 gram rhodium and 0.06 gram gold per tonne, plus 0.16% nickel and 0.1% copper. The estimate is based on a cutoff grade of 0.5 gram PGEs plus gold. The deposit remains open.

To help fund the work, Anooraq has arranged to raise $20 million via the private placement of 9.5 million units at $2.10 apiece to qualified investors. Each unit comprises one share plus half a warrant, with one warrant good for one share at $2.50 per share until June 1, 2005.

Desjardins Securities, agent for the financing, will be paid a cash commission equal to 6% of the gross proceeds. The agent will also receive broker warrants good for up to 6% of the total number of shares issued.

The warrants issued under the offering would expire within 30 days of Anooraq’s closing share price on the TSX Venture exchange exceeding $5 for any 10 consecutive trading days.

Subject to final agreements and regulatory approvals, the financing is expected to close by year-end. Following the financing, Anooraq would have around 52.3 million shares issued and outstanding.

Shares in Anooraq were trading 7 lower at $2.04 in late afternoon trade in Vancouver on Dec. 10. The shares trade in a 52-week window of 40-$2.75.