Afcan tops up till for TJS project

Junior Afcan Mining (AFK-V) has raised $9.4 million by privately placing 40 million units priced at 25 apiece.

The units, consisting of a share and half a warrant, are subject to a 4-month hold period. This includes any shares arising from the warrants, which expire in two years and are priced at 37.5 apiece.

Underwriters Kingsdale Capital Partners, Dominick & Dominick Securities and VSA Resources (based in Europe) were paid $600,000 and issued 4 million broker’s units. The units expire in 1.5 years and are priced at 37.5 each.

Net proceeds are earmarked for the TJS (Tanjianshan) gold project in northwestern China, in which Afcan can earn an 85% stake by paying US$5.6 million to Australian-based Sino Gold. Most is to be covered by revenue from future gold production, though US$825,000 (US$125,000 has been covered) must be paid by year-end.

TJS hosts an inferred resource of 3.3 million tonnes averaging 6 grams gold per tonne. According to the Beijing General Research Insitute of Mining and Metallurgy, the resource can support six years of mining at a production rate of about 70,000 oz. annually.

To validate that claim, since April, Afcan has been carrying out infill drilling aimed at bumping up the inferred resource to indicated status. To date, more than 4,500 metres have been sunk.

As part of the deal, it must begin constructing a mine by year-end.

(The company has been processing a small stockpile in an existing plant since late May; however, the material is expected to be depleted shortly. The company will now carry out metallurgical tests on material in the leach pads and tailings dams in order to determine the feasibility of reprocessing it. That material is said to total about 600,000 tonnes grading an average of 3 grams gold per tonne.)

Drilling also will be carried out at the M7 and Pubugou deposits, which are adjacent to one of the two main deposits hosting the known resource. Several anomalies located elsewhere on the 350-sq.-km property will be investigated as well.

The remaining 15% in TJS is held by The First Brigade for Geology and Mineral Exploration of Qinghai Province and Dachaidan Gold Mine. The latter produces 1,400 oz. gold per month.

Aside from TJS, Afcan holds exploration permits in Sierra Leone, Mali, Guinea and Burkina Faso. The first two are prospective for gold; the Guinean project, for massive sulphides; and the Burkina Faso project, for phospate deposits.

Afcan has 81.6 million shares outstanding, or 121.8 million on a fully diluted basis.