Ashanti, Afcan team up in Sierra Leone

Already partnered at the Kalako permit 3 km east of Kalana in nearby Mali, Ashanti Goldfields (ASL-N) and Montreal-based Afcan Mining (AFK-V) have inked a deal that could see Ashanti take up to an 80% stake in two prospecting licences in Sierra Leone.

Under the deal, Ashanti can explore the Nimini East and West licences for four months in return for US$25,000. After that, the Ghana-based gold producer can take a 51% interest in the properties by paying US$75,000 in cash over one year and spending US$500,000 on exploration over 2 years. Ashanti can boost its stake to 71% by paying another US$275,000 over four years and spending US$1 million on exploration; another 9% can be had by completing a bankable feasibility study, which must be completed within six years.

If Ashanti withdraws from the project at any time, its stake is immediately halved, and Afcan assumes operatorship. If either company’s stake falls below 5% it reverts to a 15% net profits royalty.

The agreement is subject to government approval.

The contiguous properties are situated in the Nimini Hills Archean greenstone belt, 220 km east of Freetown. The 56-sq.-km Nimini West property is home to the Komahun gold prospect where a 1967 discovery hole returned 8.6 grams gold per tonne over an estimated true width of 4.9 metres. In the early 1980s, five core holes outlined a steeply dipping, gold-bearing vein system over a strike length of about 250 metres. The best hole yielded 9.75 metres running 4.6 grams gold. The zone remains open at depth and along strike.

The 42-sq.-km Nimini East property hosts the Nimikord gold prospect, a 1.1-km-long gold-in-soil anomaly.

Afcan holds the 2-year permits through its 75%-owned subsidiary Nimini Mining. The permits can be renewed once.

Ashanti plans an exploration program for early May, before the wet season begins in July.

Earlier this year, Afcan signed Ashanti on as a partner for early-stage gold exploration at Kalako. Ashanti can earn a 60% interest by spending US$350,000 by January 2006; it can increase this to 70% by spending a further US$650,000, and to 85% by providing a bankable feasibility study.