Dynasty Gold tempts AngloGold into Chinese projects

Vancouver – Dynasty Gold (DYG-V, DGDCF-O) has entered an agreement, landing AngloGold Ashanti (AU-N) as an investor and partner in two of its northwestern Chinese mineral projects.

The deal will see AngloGold’s Chinese subsidiary invest US$2 million into Dynasty Gold by way of a 5.75-million unit private placement at 40 apiece. Units are comprised of a share and a half-warrant, with each full warrant exercisable at 60 for two years. AngloGold will hold an initial 8.74% stake in the junior through the investment.

Dynasty will split the funds for exploration of its Red Valley and Wild Horse projects in Qinghai Province and Gansu Province respectively, with the programs to be planned and executed jointly by both companies. Following the initial program, AngloGold can elect to enter an earn-in and joint venture agreement on the projects by spending US$2 million over one year. A further US$3 million in expenditures over the following two years will secure the major a 55% interest in the joint venture.

Dynasty’s interests in the Red Valley and Wild Horse properties are held through its 70% holdings of the Sino-Foreign joint ventures, which manage the projects. The company can boost its interest to 80% through additional expenditures.

Both projects are located in the Qilian metallogenic belt. Red Valley hosts gold mineralization in a structurally controlled alteration zone within late Proterozoic to Ordovician aged sediments and volcanics. Past trenching has identified several zones of mineralization reported at 5-to-10 grams gold per tonne. The area also has seen placer gold production.

Wild Horse contains numerous gold-copper occurrences in addition to magnetic and structural anomalies. One prior hole drilled by the Chinese partners is reported to have intersected up to 45 metres of stratabound mineralization averaging 2.2 grams gold.

With 60 million shares outstanding, Dynasty Gold posts a $24 million market capitalization based on its recent 40 trading level.