Subiaco-based Balkans Gold Ltd will undergo a name change as it expands its geographical reach to Africa following an agreement to acquire West African Resources Ltd for $1.5 million.
Subiaco-based Balkans Gold Ltd will undergo a name change as it expands its geographical reach to Africa following an agreement to acquire West African Resources Ltd for $1.5 million.
Under the binding agreement, Balkans will acquire 100 per cent of the issue capital in WAR in consideration for 15 million shares priced at 10c a piece. In addition 8 million options, exercisable at 15c each and due to expire on Nevember 30 2011, will also be issued to WAR shareholders and management.
WAR holds an advanced gold project in Burkina Faso and exploration permit applications in Niger.
"This acquisition provides Balkans with an excellent opportunity to capitalise on the growing
number of successful projects undertaken in the West African region, providing access to
international capital markets by way of positive reception to African resource projects," Balkans said in a statement.
Additionally, directors in Balkans have proposed a change of the company name to International Resources Holdings Ltd to better reflect its expanded focus.
The name change and acquisition is subject to shareholder and regulatory approvals.
Balkans Gold share price jumped over 20 per cent to 9.5c at 12:30AEST.
Below is the full announcement:
The Directors of Balkans Gold Limited (Balkans) are pleased to announce the signing of a binding Heads of Agreement to acquire 100% of the issued capital of West African Resources Limited (West African), an exploration company with an advanced gold project in Burkina Faso and exploration permit applications in Niger. West African's experienced management team will also join Balkans to advance the projects and to assess other resource opportunities throughout Africa. The Directors believe that Burkina Faso, and the West African region in general, remains under-explored and has excellent mineral endowment potential.
Highlights
- Burkina gold project located immediately along strike from Orezone Resources Inc's undeveloped 1.1Moz Au Bomboré deposit
- 2000km2 project area located in highly prospective mineral province, including 70km strike of greenstone and proximity to major infrastructure
- Advanced targets with excellent rock chip and RC drilling results including 8 metres at 12.47g/t Au including 4 metres at 22.30 g/t Au, from 34m
- Addition of a proven management team with extensive experience throughout West African region
- West African MD, Mr. Richard Hyde, to join Balkans Board and drive African strategy
1. Summary of Gold Assets
West African has secured a large land holding located in Burkina Faso, West Africa (Boulsa Project). The Boulsa Project covers some 2000km2 and 70km of greenstone immediately along strike from the undeveloped 1.1 Million Oz Au Bomboré deposit, owned and operated by TSX listed company Orezone Resources Inc (Figures 1 & 2). Drill testing of West African's target areas has identified significant gold mineralisation. Only 8 holes have bee completed to date on the project with results indicating significant upside potential and justification for further drilling.
The Boulsa Project is situated less than 100km by sealed road east of the capital Ouagadougou. Major infrastructure required to advance the project is available, including power, water and mobile telephone coverage. A comprehensive exploration program established by West African will be implemented by Balkans on settlement of the acquisition.
The Fatmatenga Prospect is located in the central portion of the Boulsa Project Soil sampling on a 400m by 100m grid has defined a northeast trending 800m by 300m +30ppb Au anomaly, including a peak value of 5.7g/t Au. Rock chip sampling of outcropping quartz veins returned results including 14.44g/t Au, 14.74g/t Au, 8.9g/t Au and 5.24g/t Au. These results have been tested by only two RC holes to date with results including:
- 8m at 12.47g/t Au from 34m downhole, including 4m grading 22.30g/t Au (Figure 3)
- 2m grading 1.6g/t Au from surface and 2m at 1.05g/t Au from 42m
Mineralisation is open along strike and down dip, and will be followed-up in an upcoming drilling program by Balkans.
The Meguet Prospect is also located in the central portion of the project area, approximately 4km southwest of the Fatmatenga Prospect, along the same mineralised structure. The prospect is defined by significant gold mineralisation in rockchips, soil sampling and trenching including a +25ppb gold-in-soil anomaly over 8km in length and up to 1.7km in width. Infill sampling over the northeastern portion of the anomaly defined a 1000m by 400m +100ppb Au soil anomaly including peak values of 2.5g/t Au 1.0g/t Au and 0.9g/t Au. Follow-up results from rock chip sampling of outcropping quartz veins include 13.7 g/t Au, 8.9 g/t Au and 3.11 g/t Au.
The northeastern area has only been tested by four RC drillholes to date with best results including 22m at 1.29g/t Au from 32m, including 4m at 4.40g/t Au (Figure 4). These results are coincident with active artisanal mining over a 600m trend with pits extending down to 30m below surface. Gold is being extracted from a concentrate on site by local miners using traditional mercury-based methods. Mineralisation is open along strike and down dip and will be followed-up in an upcoming drilling program by Balkans.
Other prospects
Boudry-Tanguin is located in the southwest corner of the project area and is defined by a number of spot highs from soil sampling including 560ppb Au, 145ppb Au, 63ppb Au and 55ppb Au (Figure 2). Composite grab sampling of quartz float has returned high grade results including peak values of 54.4g/t Au and 135.5g/t Au. The best results returned from rock chip sampling of outcropping quartz veins include 66.7g/t Au, 13.3g/t Au, 3.23g/t
Au and 2.11g/t Au.
Ziga is located in the northwest portion of the project area and has returned peak values including 196ppb Au and 79ppb Au from soil sampling (Figure 2). Rock chip sampling returned high grade results up to 26.54g/t Au while continuous rock chip sampling of outcropping quartz veining returned 9.6m at 2.26g/t Au.
Balkans, with the addition of West African's management team, intends to follow an exploration strategy aimed at rapidly advancing existing targets and generating further targets through the application of modern exploration techniques. For further information regarding West African's projects visit www.balkansgold.com/westafrican
2. Company Structure
Due to the advanced nature of the company's East European assets and a focus towards production at the Breznik and Rakitovo projects, the Directors of Balkans have been in review of several strategic options for the company to diversify operations as well as expand the geographic reach of Balkan's asset base.
This acquisition provides Balkans with an excellent opportunity to capitalise on the growing number of successful projects undertaken in the West African region, providing access to international capital markets by way of positive reception to African resource projects. In order to confirm Balkans strategic direction, the Directors propose a change of the company name to International Resource Holdings Limited. The new company name will be reflective of the Companies expanded international gold asset base and will involve two 100% owned subsidiaries being West African Resources and European Resources. The change of name will be subject to obtaining all necessary shareholder and regulatory approval.
3. Summary of Transaction
Balkans has entered into binding Heads of Agreement to acquire 100% of the issued capital of West African in consideration of 15,000,000 ordinary shares in Balkans based on a valuation of $0.10 per Balkans Share. In addition 8,000,000 options will also be issued to the shareholders and management of West African. The options will be exercisable at 15 cents and expire on the 30th November 2011.
The acquisition of West African is also subject to both Balkans and West African obtaining all necessary shareholder and regulatory approvals (including those required by the Corporations Act and/or ASX) in respect of the transaction, including the issue of Balkans shares.
4. Board Changes
The Directors are also pleased to announce the appointment of Richard Hyde to the board of Directors, subject to settlement of the acquisition. Richard is a geologist with more than 13 years experience in the minerals industry, including over 5 years experience operating exclusively within West Africa. He has worked in a number of different geological environments in Australia, Africa and Eastern Europe. Richard has managed large exploration projects and worked extensively within the industry as Regional Manager - West Africa, and as senior consultant with RSG Global based in West Africa and Australia.
The Directors believe that this revised Company structure and appointment of Mr. Hyde will greatly enhance Balkans reputation in the market whilst confirming its future as a focused gold exploration company.
