A share transaction valued at $3 million will allow Sahelian Goldfields (SHGI-C) to acquire rights to the Poura gold mine in Burkina Faso, West Africa.
The Toronto-based junior plans to acquire a 90% interest in the past producer and its surrounding area from Ashanti Goldfields (AHD.U-T) in return for 3 million shares and 2 million warrants. The African gold miner will also have the right to nominate a representative to Sahelian’s board of directors.
The transaction is subject to due diligence, the signing of a definitive agreement and regulatory approvals. Once the deal closes, Sahelian will use a US$14-million, non-refundable grant from a European development agency to fund mine rehabilitation and development, as well as complete a feasibility study. At the same time, the company will start an exploration program over the entire property, to be funded internally.
The Poura project consists of an 11-sq.-km mining licence within a 500-sq.-km exploration permit. Infrastructure includes a power station, and a mill with a production capacity of 1,000 tonnes per day.
The Poura mine has produced more than 600,000 oz. gold from a single, S-shaped, steeply dipping structure. Open-pit and underground workings extend 3,000 metres in length and fewer than 300 metres in depth.
Sahelian says the mine area has excellent exploration potential, given that the structure appears to extend both laterally and at depth.
Surface prospecting has identified more than 100 quartz veins, few of which have been tested. The property also contains oxide targets, where gold mineralization is believed to be suitable for heap leaching.
The government of Burkina Faso will hold a 10% interest in the project.
Elsewhere in Africa, Sahelian is exploring 10 gold concessions covering 80 sq. km in Mali.
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