Medoro goes for gold in Mali (April 30, 2007)

Medoro Resources (MRS-V, MRL-L) has signed an option agreement for nine gold properties in Mali, boosting and diversifying the company’s current portfolio of two adjacent properties in Venezuela.

Eight of the properties are located in the Bougouni region of southern Mali, near Resolute Mining’s (RMGGF-O, RSG-A) Syama gold project, which hosts resources of 66.6 million tonnes grading 3 grams gold per tonne, or about 6.4 million oz. Also in the area is the Morila mine owned by Randgold Resources (GOLD-Q, RRS-L) and AngloGold Ashanti (AU-N, AGD-L, ANANO-J), which produced about 500,000 oz. gold in 2006.

The ninth property is located near AngloGold’s Sadiola gold mine, in the Kenieba region of western Mali.

Under the agreement with African Gold Resources S.A., Medoro will first pay US$720,000 to acquire the shares of the Panama-based company, which holds the options to acquire the nine properties. Medoro will then pay another US$2.43 million and issue 6 million shares to Gold Resources S.A., which Medoro describes as the current shareholder of African Gold.

Medoro will assume African Gold’s earn-in obligations on each of the nine properties, which include a payment of US$224,000 and a one-time payment of US$9 per oz. of measured gold resources and US$4 per oz. of indicated resources. If any of the properties contains more than 500,000 oz. of measured and indicated gold resources, Gold Resources will receive a one-time payment of US$6 per measured oz. and US$4 per indicated oz.

In early March, Medoro released its initial drill results for its Lo Increible 4A and 4B concessions in the Guyana Shield, in the El Callao mining district of Venezuela. Highlights include a 48.6-metre intersection grading 2.5 grams gold per tonne, including an 8.5-metre section that averaged 7.1 grams gold.

At that time, Medoro shares were trading between 50 and 65, but over the last week, the stock has closed as high as $1.32.

Shares dropped to $1.23 on news of the acquisitions and continued the downward trend with a 20% decrease, closing at 98.

Medoro reports that the properties have regional soil anomalies and radiometric potassium anomalies, which are favourable, and similar to known deposits.

In total, the company has acquired more than 1,200 sq. km of land. Medoro chose the properties through a database maintained by the Documentation Centre of the Ministry of Natural Resources of Mali.