Hemlo options Ghanaian ground

Yet another Canadian-based gold producer has begun searching for the yellow metal in West Africa.

Hemlo Gold Mines (TSE) is earning a 72% share of Birim Goldfields’ (CDN) 90%-held Dunkwa gold property in Ghana. The Ghanaian government holds the remaining 10%.

The property comprises 230 sq. km in the southwestern corner of the country. It is underlain by a 45-km section of the Ashanti gold belt, which hosts the Ashanti gold mine to the north and the Bogosu mine to the south. The land package under option represents 90% of the prospective ground between these two large operations.

Initially, Birim will operate the project, but Hemlo can assume that responsibility if results warrant.

According to Birim spokesman Francois Desrosiers, exploration at Dunkwa will start in September, after the rainy season.

“We plan to complete a soil geochemical survey covering the entire property,” he says. “Geochemical anomalies will be followed up with trenching and sampling. Birim will then complete about 5,000 metres of drilling on the some of the best-trenched anomalies, as well as other previously defined targets on the southern portion of the property.”

This agreement represents Hemlo’s first foray into Africa and is part of the company’s new strategy to expand its exploration activities on an international basis.

Hemlo can earn the interest by spending US$5 million over four years; it has already earmarked US$1 million for the first year. Hemlo will also buy $150,000 worth of Birim treasury shares this year, plus an additional $150,000 worth of shares in each of the succeeding three years.

Excluded from the agreement are the oxide reserves delineated in the Aboronye-Mampon prospect. Birim intends to complete independent exploration in order to advance the prospect to the feasibility stage. Should the junior find reserves are in excess of 300,000 oz., Hemlo can earn its proportionate interest in the prospect by paying Birim twice the amount it spent on exploration.