Great Quest to focus on Baroya Banro prolongs suit against DRC

Vancouver-based Great Quest Metals (GQ-V) has renegotiated its right to earn a 95% interest in the Baroya concession, 12 km north of Kenieba in western Mali. The project is west of, and adjacent to, the Segala concession, which is being explored by Semafo (SMF-T).

The Baroya concession comprises three gold zones, which are ready to be drill-tested: Baroya Nord, Baroya Central and Segala Extension. The company notes that an outside party drilled a 100-metre hole to test the Segala Extension zone, and efforts are under way to determine the results of this hole. In the meantime, Great Quest remains encouraged by last year’s trenching on the Baroya Nord zone; results from test pits and trenches include 2.5 metres of 1.06 grams gold per tonne, 6 metres of 4.93 grams, 3 metres of 2.2 grams, 6.4 metres of 1.6 grams, and 3.2 metres of 46 grams.

Mali is enjoying a gold-mining resurgence led by the success of the Sadiola Hill gold mine, operated by partners Iamgold (IMG-T) and AngloGold (AAUK-Q). For the 9-month period ended Sept. 30, 2000, the open-pit mine turned out 468,932 oz. gold at an average cash cost of US$98 per oz. and an average total cost of US$118 per oz. Iamgold and AngloGold each hold a 38% stake in the mine, with the remainder held by the government.

In mid-2001, Iamgold and AngloGold are to begin production at the nearby Yatela project, in which they each hold a 40% interest. Reserves there stand at about 10 million tonnes grading 3.6 grams gold within a larger resource estimated at 33 million tonnes grading 2.1 grams. The average cash cost over the 6-year mine life is forecast to be US$175 per oz. (based on a gold price of US$275 per oz.). Capital costs for the heap-leach project are US$75 million.

A wholly owned subsidiary of Banro Resource (YBN-V) intends to continue its longstanding legal dispute against the Democratic Republic of Congo in a federal court in Washington, D.C.

Banro’s American subsidiary filed an action against DRC pursuant to the Foreign Sovereign Immunities Act (FISA) in an effort to seek a remedy for the government’s expropriation of gold-mining assets held by its Congolese subsidiary, Sakima Sarl. The company says it chose this course of action because a previous appeal to the International Centre for Settlement of Investment Disputes ended when the agency opted not to exercise jurisdiction in the matter. FISA allows U.S. companies to sue foreign governments in American courts without the benefit of diplomatic immunity under certain conditions. Banro feels that such conditions exist in this case because the government of DRC held a 7% interest in Sakima Sarl, and is engaged in commercial activity relating to the expropriated assets.