Ashanti joins Afcan in Sierra Leone

Already partnered at the Kalako permit, 3 km east of Kalana in nearby Mali, Ashanti Goldfields (ASL-N) and Montreal-based Afcan Mining (AFK-V) have inked a deal that could see the former acquire an 80% stake in two prospecting licences in Sierra Leone.

Ashanti can explore the Nimini East and West licences for four months in return for US$25,000. The Ghana-based gold producer can then take a 51% interest in the properties by paying US$75,000 in cash over one year and spending US$500,000 on exploration over two years.

Ashanti can boost its stake to 71% by paying another US$275,000 over four years and spending US$1 million on exploration, and another 9% can be had by completing a bankable feasibility study within six years.

If Ashanti withdraws from the project at any time, its stake will be halved and Afcan will become the operator. The agreement has yet to be approved by the Sierra Leone government.

The contiguous properties are in the Nimini Hills Archean greenstone belt, 220 km east of Freetown. The 56-sq.-km Nimini West property is home to the Komahun gold prospect, where a 1967 discovery hole returned 8.6 grams gold per tonne over an estimated true width of 4.9 metres. In the early 1980s, five core holes outlined a steeply dipping, gold-bearing vein system over a strike length of about 250 metres. The best hole yielded 9.75 metres running 4.6 grams gold. The zone remains open at depth and along strike.

The 42-sq.-km Nimini East property hosts the Nimikord gold prospect, a 1.1-km-long gold-in-soil anomaly.

Afcan holds the 2-year permits through its 75%-owned subsidiary, Nimini Mining. The permits can be renewed once.

Exploration by Ashanti is under way.

Earlier this year, Afcan signed Ashanti on as a partner for early-stage gold exploration at Kalako. Ashanti can earn a 60% interest by spending US$350,000 by January 2006, and it can increase this to 70% by spending a further US$650,000, and to 85% by providing a bankable feasibility study.