West Perth-based gold and base metals explorer Shield Mining Ltd will expand its African copper interests after signing a memorandum of understanding with Canada-based Majescor Resources Inc.
West Perth-based gold and base metals explorer Shield Mining Ltd will expand its African copper interests after signing a memorandum of understanding with Canada-based Majescor Resources Inc.
Under the deal, Shield will progressively earn-in to Majescor's Besakoa permit in southern Madagascar, in exchange for the issuing of 500,000 shares and a commitment to spend around $1.1 million to earn a 50 per cent stake in the property - with a firm commitment to spend half that amount in the first year.
Shield will be able to earn another 10 per cent by spending around $2.4 million.
The full text of a Shield announcement is pasted below
Australian company, Shield Mining Limited (ASX:SHX) is expanding its African copper interests under an agreement announced today to explore on the island of Madagascar off the east coast of Africa.
Under a Memorandum of Understanding ("MOU") signed with Majescor Resources Inc (TSX-V:MAJ), Shield can progressively earn-in to the Besakoa permit in southern Madagascar.
The move represents Shields's second entry into Africa's copper sector this year. The Company in April signed a joint venture agreement with General Mining Services S.A. to explore their Saboussiri permit in southern Mauritania. Shield has existing gold and base metals exploration interests in Mauritania and recently announced it had applied for uranium licences in Mauritania.
Mr David Netherway, Shield Mining's Chief Executive Officer said today: "The signing of this MOU gives Shield a foothold into Madagascar. We think the Volcanogenic Massive Sulphide ("VMS") deposit potential of the Besakoa property is exciting as the area is possibly one of the last remaining untested VMS districts in southern Africa."
Terms of MOU
The MOU, which is subject to regulatory approval, allows for a 3 month exclusive due diligence period for which Shield will pay C$20,000. Following this, Shield will issue 500,000 Common Shares in Shield Mining Ltd to Majescor and commit to spend C$1 million to earn a 50% interest in the property with a firm commitment to spend C$500,000 in the first year. Another 10% can be earnt by spending an additional C$2m and thereafter Majescor can contribute or be diluted.
If either party is diluted to 10%, a 2% Net Smelter Royalty will be retained by the diluted partner.
Besakoa
The Besakoa property measures 10 km x 7.5 km and is located 200 km east of Toliara, in southern Madagascar. The property hosts the Besakoa, VMS polymetallic prospect, which was discovered by the French Bureau de Recherches Géologiques et Minières ("BRGM") and drilled by them in the late 1950s. Preliminary near-surface core drilling of the Besakoa VMS prospect by Majescor in December 2006 (8-hole, 431m program) returned a 21.5 m intersection grading 0.7% Copper, 0.5 g/t Gold, 1.1% Zinc and 21.4 g/t Silver (see Majescor Press Release dated February 8, 2007).
Elsewhere on the property, there are eight other surface geochemical copper-zinc gossans within 10 km to the south and southwest of the Besakoa VMS deposit. There are three clusters of gossans, including some with copper mineralisation, within or at the margin of the property to the west and north of the deposit area.
The clusters of copper occurrences and gossans in a favourable stratigraphy over a 100 km (NNE-SSW) x 35 km (across strike E-W) with one known VMS prospect at Besakoa represents a highly favourable environment in which to find multiple VMS deposits.
After the due diligence and a review of the data, Shield will undertake airborne magnetics and EM, mapping, drainage and soil sampling, followed up with gravity and EM on local grids. This will be followed by drilling.
