Vancouver — Under a friendly, all stock takeover bid, Buffalo Gold (BUF.U-V, BYBUF-O) plans to acquire Dynasty Gold (DYG-V, DGDCF-O).
Subject to shareholder and regulatory approvals, Buffalo Gold will issue one share for every 4.5 Dynasty Gold shares, warrants or options, representing about a 29% premium on Dynasty shares based on closing prices prior to the announcement.
Buffalo stands to absorb Dynasty’s three Chinese gold projects: Hatu, Red Valley and Wild Horse.
Hatu, located in the Xinjiang Autonomous Region of northwestern China, hosts the Qi-2 past producing mine. The Qi-2 deposit has 16.9 million inferred tonnes grading 1.7 grams gold per tonne (913,000 contained ounces gold), with data from a 2006 drill program (56 holes, 8,900 metres) being compiled into a new resource estimate. Avocet Mining (AVM-L, AVVGF-O), a major shareholder of Dynasty, is earning into the project.
At Red Valley in north-central China’s Qinghai Province, Dynasty is exploring with partner AngloGold Ashanti (AU-N, ANG-J, AGG-A).
A surface anomaly of more than 20 km at the project is being explored for gold, arsenic, antimony and mercury coincident with major structures. Initial drilling in 2006 cut narrow intervals of up to several grams gold.
In Gansu province, northwestern China, Dynasty also has a finan- cing partnership with AngloGold Ashanti at the Wild Horse project. Two large anomalies have been identified at Wild Horse through satellite imagery on the 3,000-sq.-km land package, located in a gold-producing region. Surface grab samples have returned up to 3.6 grams gold.
In addition to its planned acquisition of Chinese mineral projects from Dynasty, Buffalo Gold recently tabled an $11.4-million budget for its 2007 exploration program at the Mt. Kare gold project in Papua New Guinea. Up to 12,000 metres of drilling in 60 holes is planned.
Buffalo has rights to acquire up to a 90% interest in the project, assigned through offshore company Longview Capital Partners, from Madison Minerals (MMR-V, MMRSF-O) for staged payments and work commitments leading to the completion of a bankable feasibility study.
A resource estimate conducted on Mt. Kare in 2000 reviewed 14.68 million indicated tonnes grading 2.36 grams gold and 33.7 grams silver per tonne plus 10.85 million inferred tonnes at 1.98 grams gold and 22.7 grams silver using a 1 gram gold-equivalent cutoff and cutting all high-grade assays to 30 grams gold.
Buffalo also holds early stage gold, base metals and uranium exploration projects in Australia.
Shares of Dynasty Gold gained about 14% on the takeover news to close up 4 at 32 apiece. Buffalo Gold traded essentially even, off a couple of pennies at $1.40 per share.
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