St. Jude boosts Hwini-Butre interest to 80%

Vancouver – St. Jude Resources (SJD-V) has served notice it intends to exercise its call option, buying out Crew Gold’s (CRU-T) 25% interest in the Hwini-Butre gold project in western Ghana.

The deal will solve the previous legal dispute that clouded ownership of the project, and now give St. Jude an 80% interest in the property.

Last year, a judgement was issued against Crew Gold relating to its title to Hwini-Butre. St. Jude, the project operator, had been earning up to a 65% interest from Crew, and had reached a 49% ownership level by completing required exploration expenditures.

The new agreement essentially solves the title issues as it triggers St. Jude’s previous arrangement with the original Ghanaian owner entitling it to retain a 10% carried interest. With the Ghanaian government getting its standard 10%, St. Jude will hold the remaining 80% interest in the advanced stage gold project.

St. Jude is issuing US$5 million in shares to Crew for the purchase. The 3 million shares will be under a four month hold schedule, following which, two-thirds of the shares become free-trading and one-third will be subject to a further 12-month hold. The deal has the bonus of canceling an US$800,000 cash payment due from St. Jude under the prior earn-in agreement.

The company is completing a feasibility study on Hwini-Butre and the adjacent Benso concession. Mineral resource estimates conducted in 2004 reviewed 5.9 million tonnes of measured and indicated resource grading 3.5 grams gold per tonne at Hwini-Butre (660,000 oz. of contained gold). The study also showed an additional 3.9 million tonnes of indicated eluvial resource on the project averaging 1.4 grams gold (169,000 oz. of contained gold).

The study also covered St. Jude’s northerly adjoining Benso project, reviewing a measured and indicated resource of 5.3 million tonnes grading 2.9 grams gold (487,000 oz. of contained gold).

With its increased interest in Hwini-Butre, St. Jude is now positioned with a significant contiguous land position hosting a combined insitu measured and indicated gold inventory of over 1.3 million oz. on western Ghana’s Ashanti Gold Belt.

With a focus on West Africa, the company is also actively exploring gold projects in Mali and Niger.

St. Jude shares have risen about 15%, over the past few weeks, to the $2.10 level. With its 39.3 million shares outstanding, the company posts an $83 million market capitalization.