Aureus Mining Inc. - Acquisition of Sarama Resources Liberian Licences
TORONTO, Nov. 3, 2015 /CNW/ - Aureus Mining Inc., ("Aureus" or the "Company"), the TSX and AIM listed West African Gold Producer, is pleased to announce that the Company has agreed to acquire three exploration licences from Sarama Resources Ltd. ("Sarama"). These licences are contiguous to the Company's Bea Mountain Mining Licence and are located close to the New Liberty Gold Mine. Following the completion of the acquisition, Aureus will have 100% ownership of the licences and the Company's total land portfolio will increase to 1,683 Km2 from 1,402Km2
- Consolidation of highly prospective ground located contiguous to the Company's Bea Mountain Mining Licence. Following the acquisition of the three exploration licences totalling 281 km2, the Company's total landholding will stand at 1,683 km2.
- Exploration work undertaken by Sarama defined a 15 kilometre long gold corridor highlighted by gold in soil anomalies and extensive artisanal mining, which on average are within a 15 kilometre radius of the New Liberty Gold Mine.
- Sarama completed airborne geophysics, ground geochemistry and reconnaissance drilling (15 holes for 1,600 metres) on the licences and expended a total of US$ 1.8 million.
- Gold mineralisation intersected by drilling includes intercepts of 3.9 g/t over 7.5m from 9.3m and 2.3 g/t over 5m from 28m.
- The Company is purchasing Sarama Investments Liberia Limited, a wholly owned subsidiary of Sarama Resources, for a total consideration of 2,600,000 Aureus common shares. Sarama will retain an uncapped 1% net smelter return royalty on gold produced from the Cape Mount Permit. The acquisition is subject to a number of conditions precedent, including receipt of all required governmental and regulatory approvals.
- The acquired gold corridor will be the focus of follow up exploration programmes once the Company achieves a cash flow positive position, with the objective of defining new gold deposits.
Commenting on the acquisition, David Reading, President and Chief Executive Officer of Aureus Mining, said:
"The acquisition of Sarama's licences corresponds with Aureus' strategy of building a long term and sustainable gold district in Liberia. This consolidates our ownership of quality ground, adding further exploration potential and allowing New Liberty to become the hub to accelerate our regional development. We look forward to continuing the exploration programme, which to date has produced some promising results."
A map of the Company's licence holding, that now includes the to be acquired Sarama Licences can be found at the link below:
A map showing the to be acquired licences (Cape Mount, Cape Mount West and Cape Mount East) with the soil corridor and its position relative to the New Liberty Gold Mine can be found at the link below:
Past exploration and geology
Sarama conducted a US$ 1.8 million exploration programme over the licence areas starting with an airborne magnetic survey followed by regional soil sampling. This programme lead to the identification of the 15 km gold in soil anomaly that straddles the Cape Mount and Cape Mount East licences and that corresponds to the westerly extension of the Bea Mountain Greenstone Belt. This Belt is interpreted as being folded over the licence areas with the southern limb corresponding to the Silver Hills target, located in the Company's Bea Mountain Mining Licence. Subsequent trenching was undertaken in several locations along the gold corridor and demonstrated in situ mineralisation with best intercepts of 16m grading 1.7 g/t Au and 6m grading 2.3 g/t Au.
In 2014, Sarama undertook a 1,600 metre reconnaissance diamond drilling programme of 15 holes targeting the Bangoma, Saanor and Bomafa prospects. All three prospects are located in the Cape Mount license. Highlighted intersections as reported by Sarama on 8 September 2014 include:
- 3.9 g/t over 7.5 m in CMDD004 from 9.3 m
- 2.3 g/t over 5 m in CMDD007 from 28 m
- 2.5 g/t over 3 m in CMDD002 from 33 m
- 2.0 g/t over 4 m in CMDD011 from 36 m
- 1.7 g/t over 4.9 m in CMDD009 from 24.1 m
- 1.2 g/t over 6 m in CMDD006 from 7.8 m
- 1.2 g/t Au over 7 m in CMDD008 from 59 m
Gold mineralisation was intersected in all but one of the drill holes. Mineralisation is hosted within intrusives of dioritic composition and in ultramafics which are characterised respectively by brittle and ductile deformation. Alteration occurs principally as silica overprints and carbonate veinlets with some phlogopite and sericite assemblages in the ultramafics. Zones of continuous mineralisation could be highlighted at all three prospects.
The drill holes which are reconnaissance stage holes have irregularly tested the targets, with gaps reaching up to 600 metres between holes at Bangoma. At Saanor and Bomafa only 100 metre strike lengths for each prospect were tested. Altogether the holes have effectively tested only 1 km of the identified 15 km anomalous soil corridor.
The Cape Mount, Cape Mount West and Cape Mount East licences are held by Sarama Resources Liberia Ltd. The Company has agreed to acquire Sarama Investments Liberia Limited, a wholly-owned subsidiary of Sarama, a company registered in the British Virgin Islands, for a total of 2,600,000 common shares of Aureus Mining Inc. Sarama will also retain an uncapped 1% net smelter return royalty ("Royalty") on gold produced from the Cape Mount Permit. The acquisition is subject to a number of conditions precedent, including receipt of all required governmental and regulatory approvals, including the approval of the Toronto Stock Exchange to the issue of the common Aureus shares. The shares issued to Sarama will be subject to the statutory four month hold period from the date of issue.
The Bangoma target, a centre of extensive artisanal activities, located 12 Km from the New Liberty Gold Mine was the focus of the Sarama exploration programme. Once the Company develops a cash flow positive position, Aureus will undertake exploration on the rest of the 15 km soil corridor, where most of the anomalies remain totally untested. The Company has already identified targets for follow-up work, which include zones showing continuous mineralisation. The Company will undertake further field work in 2015–2016, including geology and regolith mapping with some pitting and trenching, before conducting a full interpretation of the geological and structural settings of the whole 15 km corridor. This should result in the identification of priority targets for a drill testing campaign at a later date.
About Aureus Mining Inc.
The Company's assets include the New Liberty Gold Mine in Liberia (the "New Liberty Gold Mine," "New Liberty" or the "mine") which has an estimated proven and probable mineral reserve of 8.5 Mt with 924,000 ounces of gold grading 3.4 g/t and an estimated measured and indicated mineral resource of 9,796 Kt with 1,143,000 ounces of gold grading 3.63 g/t and an estimated inferred mineral resource of 5,730 Kt with 593,000 ounces of gold grading 3.2 g/t. A Definitive Feasibility Study ("DFS") has been completed, the first gold pour has taken place and work continues on commissioning the plant for full scale commercial production. The mine is expected to have an 8 year life and annual production of 119,000 ounces for the first 6 years of production. The foregoing mineral reserve and mineral resource estimates and additional information in connection therewith are set out in the Company's technical report dated March 25, 2015 and entitled "New Liberty Gold Project, Bea Mountain Mining Licence Southern Block, Liberia, West Africa, Definitive Project Plan."
The New Liberty Gold Mine is located within the Southern Block of the 100% owned Bea Mountain mining licence. This licence covers 478 km² and has a 25 year, renewable, mineral development agreement. The Bea Mountain mining license also hosts additional gold projects of Ndablama, Gondoja, Weaju and Leopard Rock which are the focus of exploration programs during 2015. Ndablama has an indicated mineral resource of 386,000 ounces of gold grading 1.6 g/t and inferred mineral resource of 515,000 ounces of gold grading 1.7g/t and Weaju has an inferred mineral resource of 178,000 ounces of gold grading 2.1 g/t. The Yambesei (759 km2), Archaen West (112.6 km2), Mabong (36.6 km2) and Mafa West (15.6 km2) licences will also be subject to preliminary reconnaissance geological work. The foregoing mineral resource estimates and additional information in connection therewith are set out in the Company's technical report dated December 1, 2014 and entitled "Ndablama and Weaju Gold Projects, Bea Mountain Mining Licence, Northern Block, Technical Report on Mineral Resources" ("Ndablama and Weaju Technical Report 2014").
The Company also has a gold exploration permit in Cameroon.
The Company's Qualified Person is David Reading, who holds a MSc in Economic Geology from University of Waterloo, Canada and is a Fellow of the Institute of Materials, Minerals and Mining. David Reading is the President and CEO of Aureus Mining Inc. and has reviewed and approves this press release.
Forward Looking Statements
Certain information in this news release relating to Aureus is forward-looking and related to anticipated events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target" and "expect" or similar words suggest future outcomes. Forward-looking information contained in this press release includes, but may not be limited to, statements or information relating to: the New Liberty Gold Project (including the quantity and quality of mineral resource and mineral reserve estimates), the potential to upgrade inferred mineral resources, opportunities to optimize the New Liberty Gold Project, the ability of the Company to develop the New Liberty Gold Project into a mine and the proposed new plans relating thereto regarding operations and mine design, future gold production, and future cash flows, the expected mine life of the New Liberty Gold Project, progress in the fight against Ebola and the anticipated exploration and development activities of Aureus. By their nature, such statements are subject to significant risks and uncertainties that may cause actual results or events to differ materially from current expectations, including: risks normally incidental to exploration and development of mineral properties; the inability of the Company to obtain required financing when needed and/or on acceptable terms or at all; risks that the cost of implementing the new mine plan at the New Liberty Gold Project and the operating cash costs of the New liberty Gold Project exceed those estimated in the new mine plan; uncertainties in the interpretation of results from drilling and test work; the possibility that future exploration, development or mining results will not be consistent with expectations; regulatory and government decisions; the possibility that future drawdowns under the loan facilities may not be available; construction of the New Liberty Gold Project being delayed and/ or over budget; economic conditions; availability and cost of financing; estimates of capital and operating costs and start-up costs; plans regarding construction activities; risks related to the Ebola crisis; and future unforeseen liabilities and other factors including, but not limited to, those listed under "Risk Factors" in the Company's Annual Information Form dated March 26, 2015, a copy of which is available on SEDAR at www.sedar.com, and in the Aureus Mining Admission Document, a copy of which is available at www.aureus–mining.com. Readers are cautioned not to place undue reliance on forward-looking information as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking information. Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable law, Aureus disclaims any obligation to update or modify such forward-looking information, either as a result of new information, future events or for any other reason.
With respect to forward looking information contained in this news release, assumptions have been made regarding, among other things: general business, economic and mining industry conditions; interest rates and foreign exchange rates; mineral resource and mineral reserve estimates; geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral resources and mineral reserves) and cost estimates on which the mineral resource and mineral reserve estimates are based; the parameters and assumptions employed in the New Liberty Technical Report, (including but not limited to, those relating to construction, future mining and operating costs, processing and recovery rates, net present values and internal rates of return, timing for the commencement of production, tax and royalty rates, future gold prices, metallurgical rates, pit design, operations and management, grades, the base case analysis and the proposed budget for further exploration plans and objectives); the supply and demand for commodities and precious and base metals and the level and volatility of the prices of gold; market competition; the ability of the Company to raise sufficient funds from capital markets and/or debt to meet its future obligations and planned activities; the business of the Company including the continued exploration of its properties; the political environments and legal and regulatory frameworks in Liberia and Cameroon with respect to, among other things, the ability of the Company to obtain, maintain, renew and/or extend required permits, licences, authorizations and/or approvals from the appropriate regulatory authorities and the ability of the Company to continue to obtain qualified staff and equipment in a timely and cost-efficient manner to meet its demand. Assumptions used in the preparation of such information, although considered reasonable by Aureus at the time of preparation, may prove to be incorrect.
Any mineral resource and mineral reserve figures referred to in this press release are estimates and no assurances can be given that the indicated levels of minerals will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While the Company believes that the mineral resource and mineral reserve estimates in respect of its properties are well established, by their nature mineral resource and mineral reserve estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such mineral resource and mineral reserve estimates are inaccurate or are reduced in the future, this could have a material adverse impact on the Company. Due to the uncertainty that may be attached to inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
SOURCE Aureus Mining Inc.