Sutton negotiating African joint ventures

Within the next several weeks, Sutton Resources (VSE) expects to have signed a formal agreement to acquire interests in gold concessions in Guyana and base metal projects in Tanzania. Romanex International, a private firm headed by Roman Shklanka, is negotiating with the governments of the two African countries for the concessions, while Sutton has the right to earn a 55% interest in Romanex’ holdings. Both project areas are said to contain preliminary reserve estimates although no figures have been disclosed.

Michael Kenyon, president of Sutton, said negotiations are in the final stages and he expects the final deals to be signed shortly.

Sutton’s agreement with Romanex calls for the company to issue a total of three million treasury shares and make exploration expenditures totalling US$3 million. The deal also includes two properties in Thailand.

When asked about the risks of investing in foreign countries, Kenyon said both African nations recognize the need for and are responsive to outside investment. He said that Canada also has political risks, referring to the disastrous effect on mining from policies put in place during the New Democratic Party’s reign in British Columbia in the early 1970s.

Sutton recently completed a private placement with Teck (TSE) for 100,000 units at $3.36 per unit, each consisting of one share and one warrant exercisable at $3.89 for one year.

Sutton currently has about five million shares outstanding, 7.1 million fully diluted. A number of other recent financings have brought working capital to about $2 million which will rise to about $4 million on full dilution. The company also has 300,000 free trading shares of Crown Resources (VSE) which trades at about $7.

Sutton is also planning an exploration program on the Goldbank project, in northwestern British Columbia. The project is a massive sulphide target where previous sampling has returned gold, silver and base metal values. The company hopes to identify drill targets with a $250,000 program on the property this season. Sutton is earning a 51% interest in the property from Goldbank Ventures (VSE) by spending a total of $1.05 million on the property.