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IAMGOLD Corporation is is engaged in the exploration, development and operation of gold mining properties and the operation of a niobium mine. Its interests include seven operating gold mines, a niobium producer, a diamond royalty, and exploration and development projects located throughout Africa and the Americas. The Company’s...
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IAMGOLD & Avnel in option deal for Kalana gold mine in Mali
August 11 2009, 3:50pm
IAMGOLD Corp (TSX: IMG; NYSE: IAG) announced an option deal with Avnel Gold Mining Ltd (TSX: AVK) which will allow it to acquire an initial 51 percent interest in Avnel’s 80 percent holding of the company controlling the Kalana gold mine in Mali, West Africa.
The project is located in southwest Mali and consists of the Kalana mine, an operating underground gold mine, and an exploration property covering 387.4 square kilometres with a 30 year mining exploitation permit. The title is held by Societe d'Exploitation de Mines d'Or de Kalana, which is 80 percent controlled by Avnel and the remainder by the Malian government.
The deal allows IAMGOLD to earn an initial 51 percent in Avnel's share of the project by spending US$11 million on exploration activities at the site over a three-year period and by delivering a NI 43-101 resource calculation of at least 2 million ounces of gold as well as proceeding with a feasibility study.
IAMGOLD has the option to increase its interest to 65 or 70 percent upon delivering a feasibility study that supports the development of a gold mine at the exploration site.
In connection with entering into the option agreement, IAMGOLD will pay Avnel US$1 million in cash and Avnel will issue IAMGOLD warrants to acquire up to 2 million common shares of Avnel at an exercise price of C$0.45 per share.
There has been a long history of gold exploration and mining on the Kalana project that focused on rich, narrow, shallow-dipping quartz veins that occur within a broader mineralized system. This broader system, and other satellite zones on the property, have not been evaluated in systematic detail and will be the focus of IAMGOLD's exploration program, the company said.
IAMGOLD is planning to carry out an initial US$2.5 million drill program in the first year of the agreement that includes at least 6,500 metres of drilling. This initial program will be designed to test the extent and nature of gold mineralization in the halo of high grade veins that are currently being exploited at the Kalana gold mine, as well as other mineralized structures in the mine area.
