Exall joins Denison in Ghana gold project

A third partner is joining Denison Mines and Sikaman Gold Resources on the quest for the yellow metal on the original Gold Coast in the Republic of Ghana, West Africa.

Toronto-listed Exall Resources in which Denison holds a 38.6% interest has accepted an offer to purchase a 15% interest from Denison in a private Ghanaian company, which holds 90% of the 58-sq-mi property called the Bogosu concession.

This arrangement will bring Denison’s interest in Canadian Bogosu Resources down to 30% from its original 45%. Sikaman still has a 45% interest in the company, while the Republic of Ghana holds the remaining 10% interest.

Under the original agreement between Denison and Sikaman, exploration costs were to be shared jointly by the two companies. It was estimated the preliminary phase of work to be completed by the end of June would cost $1.6 million, while total exploration costs for the year will be close to $4 million.

Under the terms of the Denison and Exall agreement, Exall is required to make a payment of 15% of all costs to the date of closing by Canadian Bogosu Resources, Denison and Sikaman with respect to the licence and program. This payment is estimated at about $240,000.

In addition, Exall will enter into an agreement to assign to Denison 20% of Exall’s net income from the project, after Exall has recovered its acquisition costs and all future contributions made to fund its share of the project.

The Denison offer also requires that Exall will have completed satisfactory arrangements by closing to have available funding totalling at least $750,000. Exall says it plans a public offering to net this amount.

Acquisition of the project interest is also subject to approval by the Ghanaian authorities and confirmation by Exall’s shareholders. A meeting of the shareholders is to be called for May 14 to consider the proposal.

The Bogosu concession is located in the southwest corner of Ghana and covers most of the original operating concessions held by the old Marlu Gold Mining Areas Ltd. of London, England. Marlu mined the property from 1936 to 1955 save for a 3-year shut down during the war. Over that period, 923,913 oz of gold were recovered from 7.5 million tons of ore which averaged 0.12 oz gold per ton.

Four priority targets are being looked at this year by the joint venture, including several stream channels on the property in view of bringing the best alluvial reserves into immediate production.