Axmin eyes $10.5 million

Vancouver In an attempt to add $10.5 million to its coffers, African explorer Axmin (AXM-V) is selling 15 million units priced at $0.70 each

A unit holds one share and half a warrant. A full warrant will entitle the holder to purchase another share at a price of $1 for a period of a year. A syndicate led by Octagon Capital is heading the financing and Axmin’s major shareholder, Addax Mining &Metals has already agreed to take $3 million of the offering.

The funds are earmarked for ongoing exploration and development programs in Africa. The junior expects to launch a 15,000 metre drilling program at the Bambari permit in Central African Republic shortly.

Previous drilling by Axmin on the proeprty traced mineralization at the French Camp prospect to a depth of 110 metres for at least 150 metres along a northwesterly strike.

So far, RC drilling has delineated the Main zone over a strike length of 1.6 km. The zone comprises multiple mineralized structures varying in width from 1-20 metres in a corridor 200 metres wide. Gold mineralization is believed to be associated with acid to intermediate schists with only minor BIF units.

Elsewhere on Bambari, the first core hole to test the Katsia prospect returned 33 metres averaging 3.2 grams gold, including a 1-metre section running 42.3 grams. The hole was terminated while still cutting gold mineralization. A second hole collared 320 metres to the southeast encountered several mineralized lenses, including 6.9 metres running 2 grams gold.

The Katsia prospect comprises a 1.5-km-long zone of gold mineralization defined by soil sampling and shallow, vertical rotary air blast drilling. The steeply dipping mineralization is hosted by acidic schists associated with quartz and tourmaline veining. It lies within 20 metres of a steeply dipping banded ironstone formation.

In Mali, West Africa, Axmin recently inked a deal allowing Newmont Mining (NEM-N) to pick up an initial 40.6% stake in the Kofi project and a 47.2% interest in the recently acquired Walia West permit. To do so, the world’s biggest gold company must spend at least US$5.5 million on the properties over three years, including US$1 million in the first year. Axmin will remain as exploration manager during the earn-in period.

Once vested, Newmont can boost its respective stakes to 60.9% at Kofi and 70.8% at Walia by funding a bankable feasibility study at a cost of no less than US$1 million per year. If Newmont’s study isn’t ready within seven years, the major will pay Axmin annual advances (increasing from US$250,000 to US$1 million) over the subsequent four years.

Axmin currently holds a 81.25% interest in the Kofi, Kofi North and Netekoto permits, and a 94.44% stake in Walia West. Under the latest deal, Axmin and Newmont can acquire the properties outright, subject to government interests, which may vary from 10% to 20%.