Int’l Gold offering raises $2.5 million

A newcomer to the Canadian Dealing Network, International Gold Resources, has completed a private placement of one million special warrants at $2.50 each.

The company was formed from a merger between privately owned American Gold Resources and a listed, though inactive, company named Gateway. International Gold has 8.8 million shares issued, which have traded in a high-low range of $3.30-$2.70. Besides the special warrant offering, the company has raised cash through a convertible debenture offering. It has $4.4 million in cash and short-term deposits, with no long-term debt.

Efforts are focused on three gold properties, including the Bibiani concession in Ghana and the Humbug and Arnett Creek projects in Idaho. The company is earning a half interest in the 10.5-sq.-mile Bibiani concession in southwestern Ghana. To do so, it must spend US$3 million on exploration and development over three years and provide a bankable feasibility study. In addition to the original concession, the company and its partner have acquired certain rights to an additional 10 sq. miles on three sides of the concession.

Bibiani was first explored in the early 1900s and an underground mine was developed in 1928. Historically, the mine has produced more than 2.5 million oz. gold at an average grade of 0.3 oz. per ton.

Description of the geology has ranged from saddle reef to replacement to controlled metamorphic.

The deposit lies within the northeast-trending Bibiani Trend, the same trend which hosts Eden Roc’s deposit in the Ivory Coast, about 100 miles southeast. It parallels the Ashanti trend which hosts the Ashanti gold mine (45%-owned by London-based Lonrho), where production in 1995 is expected to reach one million ounces.

The Bibiani property holds great potential, according to Dan Idzal, president and chief executive officer of the company. “Only 15-20% of the mineralized zone has been mined using underground methods,” he told The Northern Miner. “There is also oxidized mineralization near the surface and 300,000 oz. gold (proven and probable) in the tailings.”

The total estimated resource is 10 million tons averaging 0.07 oz. gold per ton, with an additional 7.5 million tons averaging 0.038 oz. in the tailings. “The company has completed a trenching program at the south end of the main mineralized zone, which has provided further encouragement,” Idzal said, adding that he intends to start an 80-100-hole program, to total between 30,000 and 40,000 ft., in mid-January.

the company is also active in the U.S., with two projects, known as Humbug and Arnett Creek, in Lemhi Cty., Idaho.

At Humbug, the company has finished 39 holes of a 50-60-hole program which is expected to total more than 40,000 ft. Drilling will be completed next spring. The property is 25 miles northeast of the 3-million-oz. Beartrack deposit, owned jointly by Meridian Minerals and FMC (NYSE).

A pre-feasibility study of Humbug indicates a geological resource of 27 million tons grading 0.029 oz., with proven and probable reserves of 5.8 million tons averaging 0.036 oz. the company plans to work toward a full feasibility study next year.

At the Arnett Creek property, which is contiguous with Beartrack, work has centered on two deposits which operated in the 1880s. Drilling indicates a proven and probable reserve of 6 million tons averaging 0.033 oz. Drilling is planned there, as well.

Each special warrant is exchangeable, for no additional consideration, into one unit consisting of one common share and one purchase warrant. Two purchase warrants will entitle the holder to buy one common share for $2.75 until either Dec. 16, 1994, or the fifth business day following receipt of the company’s unit final prospectus, whichever comes first.

In the event the receipt is not received by May 15, 1994, buyers of the special warrants will be entitled to an additional share purchase warrant for each special warrant held.