Ghana
Noyem Gold Project
AFRICAN QUEEN MINES LTD. (the “Company”) is pleased to announce that it has now entered into an Earn-in and Joint Venture Agreement (the “Akan Agreement”), with Marshall Islands’ private company AKAN EXPLORATION LTD. (“Akan”), covering exploration, development and exploitation of the Noyem Gold Project, which is the subject of the Noyem-Nyafoman Prospecting License LVB 10244/1995 in Ghana (the “License”). Simultaneously, the Company has entered into a Purchase & Sale Agreement with Newmont Ghana Gold Limited (“NGGL”), the Ghanaian subsidiary of Newmont Mining Corporation (NYSE: “NEM”) (“Newmont”), under which NGGL is transferring the License directly to the Company’s Ghanaian subsidiary AQ Ghana Gold Ltd. (“AQGGL”), to be held in trust for the Joint Venture partners in accordance with the Akan Agreement.
The Noyem Gold Project. The License currently covers an area of approximately 28.9 sq. km. located within the Birim North District of Ghana’s Eastern Region, approximately 130 km. NW of Accra. It is at the northeastern end of Ghana’s well-known, gold-producing Ashanti Gold Belt, near Newmont’s Akyem deposit which is presently under development for potential production. It is also within approximately 100 km. of AngloGold Ashanti’s world-class Obuasi Mine and the old Konongo open pit gold mine. In addition to its close proximity to Accra which facilitates access, the Project is bisected in a NE-SW direction by a tarred road. It has long been host to large numbers of artisinal miners and in October, 2008, a shed-off area of 8.98 sq. km. adjacent to the current license area was reserved for small scale mining. This will facilitate exploration and development of potential large scale mining operations on the License.
The License was initially acquired by NGGL together with a number of other Ghana gold mining properties through Newmont’s acquisition in 2002 of Australian-based Normandy Mining Limited (“ Normandy”). Exploration conducted by Normandy’s predecessor Bonsai Gold Holdings, including diamond drilling during 1996-1997, resulted in the definition by Bonsai Gold Holdings of an historic inferred gold resource of approximately 1.1 million oz au (5.2 million tonnes @ 6.67 g/t au) down to 550 meters within reefs of the Tarkwaian conglomerates in the Eastern portion of the concession (“Noyem A”). Normandy carried out further exploration programs on the property through 2000. The Tarkwaian is typically represented by coarse clastic sediments including conglomerates, sandstones, arkoses and subordinate argillites. The style of mineralization at Noyem A is typically Tarkwaian-hosted palaeoplacer and hydrothermal gold mineralization. The historic resource estimate was not determined in accordance with N.I. 43-101 and the Company does not have sufficient information to reliably base an opinion on the accuracy or validity of the historic resource estimate. Rather, the Company views it as an exploration target for further evaluation, study and work in the near future. The Company will commission its own independent Technical Report under N.I. 43-101 after completion of its Phase 1 Exploration Program if deemed warranted by results.
In addition to the work done on Noyem A as above, NGGL tested gold anomalies at the western part of the License (“Noyem B”) with soil sampling resulting in definition of a 4 km strike anomaly. Follow-up trenching intercepted encouraging mineralization within the horizons (1-2 m) of steeply-dipping Banket conglomerates. During the period 2005-2007, a modest program of reverse circulation drilling to shallow depth was undertaken by NGGL. Gold intersections reported in the Banket conglomerates included 4 m @ 19.4 g/t au. Geophysical studies were also undertaken by NGGL, including a gravity survey of the Project area covering some 37.88 sq.km. The Company views Noyem A and Noyem B as highly prospective exploration targets and is planning to incorporate detailed studies of all the historic data and results and available core with further ground work including mapping, sampling, trenching and, where appropriate, drilling.
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The Akan Agreement. Under the terms of the Earn-In and Joint Venture Agreement with Akan, the Company may earn up to a 75% interest in the Noyem Gold Project by funding prescribed stages from exploration through feasibility. Akan has the right to participate at its election pro-rata after the Company has reached 60% ownership interest by funding all costs through pre-feasibility. The Company is designated as manager and operator of the Project on behalf of the joint venture partners, subject to full consultation with Akan on all material aspects of the Project. Phase 1 of the Project, scheduled to get underway as soon as practicable, is a ground exploration program comprised of follow-up soil and rock sampling, mapping, trenching and sample analysis, together with review of prior geophysics, drilling and other data, as well as such additional studies as the parties shall agree. The objective of the Phase 1 Exploration Program is to assess the overall geologic structure of the License area and the liklihood of commercially viable gold deposits within both Noyem A and Noyem B in the License area, as well as to identify discreet drill targets for a Phase 2 core drilling program.
Work comprising the Phase 1 Exploration Program is anticipated to be conducted by Remote Exploration Services (“RES”) of Cape Town, S.A. on behalf of the joint venture partners. The Company has utilized the services of RES effectively in connection with its exploration programs in Mozambique since 2006. The Noyem Gold Project is being managed on behalf of the Company by Senior Consulting Geologist Mr. Pete Siegfried (M.Sc., MAusIMM), a qualified person. The costs for Phase 1, estimated at up to U.S. $250,000, are being paid by the Company.
The Newmont Agreement. Under the terms of the Purchase and Sale Agreement between AQGGL and NGGL, entered into simultaneously with the Akan Agreement, NGGL has agreed to transfer the License to AQGGL, immediately upon approval of Ghana’s Minister of Lands, Forestry and Mines as is customarily required. AQGGL has agreed to pay NGGL in consideration for the transfer of the License the total sum of U.S. $850,000, $100,000 of which was due upon execution and has been paid, $250,000 of which is due upon final transfer of the License to AQGGL, $250,000 of which is due one year from the date of execution, and $250,000 of which is due on commercial production as defined. Newmont retains a 2% NSR on all production from the License, subject to a buy-back in favor of AQGGL for 1% thereof on specified terms, and Newmont retains a right of refusal to meet third party offers to acquire the Project under certain circumstances, as well as a right to reacquire the Project upon abandonment. Newmont is providing AQGGL with all available historic data and results, reports, drill core, etc. Akan has agreed to reimburse AQGGL for the first two payments to NGGL in the sum of $100,000 and $250,000, respectively.
According to Irwin Olian, CEO of the Company, “We are extremely excited to be moving forward with exploration and development of the Noyem Gold Project with our partner, Akan Exploration. Ghana is a great place to be mining, with a long history of successful operations and a positive relationship between the Government and mining operators. The Noyem Project has a large body of historic work already defining highly prospective targets. We are very happy indeed to be adding this Project to our portfolio of existing projects in Mozambique, Botswana and Namibia. Together with the King Solomon Project in Mozambique, Noyem now gives the Company two very promising gold projects with potential to host commercial, large scale deposits.”
