Westchester Resouces wants back into the mineral sector

Westchester Resources (WSR-T) is getting in on Guyana Goldfields’ (GUY-T) Peters Mine property in Guyana and the news sent the Toronto-based company’s shares soaring.

While the TSX halted trading of Westchester shares on Oct.19 the day the news was announced — after trading resumed on Oct.20, its shares gained almost 70% or 14 to 35 on 1.4 million shares traded. On the same day, Guyana Goldfields was off 6 to $9.32 on roughly 130,000 shares.

The deal between the two companies allows Westchester to earn a 50% interest in the roughly 33 sq. km and situated roughly 160 km southwest of Georgetown, the capital of Guyana.

A Guyana Goldfields technical report from January of 2004 gives a resource for Peters Mine of 420,000 tonnes grading 1.9 grams gold in the indicated category, and 353,000 tonnes grading 2.8 grams gold in the inferred category.

The move will bring Westchester back into the mineral exploration game. Founded in 1979 the company was involved in mineral exploration until 2000 when it went inactive. It re-emerged in 2004 with a new mineral property, but quickly shifted its focus to oil and gas. In its management discussion and analysis from August of this year, the company describes its principal business as oil and gas.

Its re-found interest in mineral exploration will cost Westchester the issuance of 5 million common shares to Guyana Goldfields and the commitment of $5 million toward exploration over a three-year period.

Westchester is also in the midst of trying to raise $2 million through a brokered private placement.

The financing will consist of up to 13.5 million units for 15 per unit with each unit made up of one common share and one share warrant. The warrant can be exercised for a price of 25 within 2 years.

In its most recent press release Westchester refers to itself as a junior resource company.

Guyana Goldfields is focused on the exploration and development of gold deposits in the Guiana Shield — which runs through parts of Guyana, Venezuela, Suriname, French Guyana and Brazil.