Etruscan deals Tiawa option to Placer Dome

An agreement between Etruscan Enterprises (ETT-V) and the African subsidiary of Placer Dome (PDG-T) has given that company an option for a 51% interest in the Samira gold deposit in Niger.

The deal covers a 81-sq.-km area of the Tiawa property that contains Samira. The Tiawa property is held by African GeoMin Mining Development, a company in which Etruscan holds a 56% interest.

The Tiawa property, situated approximately 100 km west of Niamey, covers 1,240 sq. km of the Sirba greenstone belt near the Burkina Faso border. The northwestern portion of the property is underlain by a large granitoid batholith. The remainder of the property is underlain by meta-volcanic, volcaniclastic and sedimentary units regionally deformed into northeast trending folds. All known gold occurrences are located in the volcano-sedimentary units in the southeastern area of the property.

Although some artisanal miners work at various locations in the Boulon Djounga area, the most important gold deposit on the property is Samira.

Mineralization there appears to be confined to a single sedimentary horizon and is controlled by the permeability and porosity of this horizon within a zone of structural deformation. The Samira horizon is up to 100 meters thick.

Gold mineralization within it is associated with quartz and fine sulphides.

In the area of the deposit, mineralization averages 2.5 to 3 grams per tonne over an average thickness of 50 meters.

The Samira deposit, according to Etruscan, hosts an in situ resource of 22.2 million tonnes averaging 2.11 grams gold per tonne.

The company is currently conducting an exploration program that includes reverse-circulation drilling on the eastern and western extensions of the Samira deposit. Detailed geophysical and geochemical surveys are also being conducted to identify new targets.

For the option, Placer will make a cash payment of US$2 million, and will spend at least US$4 million exploring the area.

In addition, Placer Dome, at the request of Etruscan, must buy US$8 million worth of Etruscan shares at their fair market value. Each common share will be coupled with a purchase warrant. The put is exercisable by Etruscan during the last 12 months of the option period.

Placer must pay US$50 million in order to exercise its option, as well as fund a feasibility study on the Samira deposit. Under Nigerian law, the government is entitled to a 10% interest in any company created to mine the project. Placer would hold a 45.9% interest in that company, and Etruscan, 44.1%.

The option period, which is 18 months, will start once the acquisition of the remaining 44% of African GeoMin by Etruscan has been approved. The exercise of the option is conditional on the completion of that acquisition by April 30, 1997. Etruscan can acquire the remainder of GeoMin for 6.5 million common shares.

In addition, Placer will acquire the right of first refusal for the remainder of the Tiawa property, as well as for other properties Etruscan may acquire in Niger.

“Placer’s technical and financial resources will accelerate the pace of development at Samira,” said Gerald McConnell, Etruscan’s president.

He noted that technical crews from the two companies have already begun meeting. Plans to move five drill rigs to Tiawa property in February are in the works.