Desert Gold Receives Conditional Exchange Approval for Acquisition of TransAfrika Belgique S.A.
TORONTO, Nov. 22, 2011 /CNW/ – Further to its press release of October 5, 2011, Desert Gold Ventures Inc. (TSX-V: DAU) (the "Company" or "Desert Gold") is pleased to announce that the TSX Venture Exchange (the "Exchange") has conditionally approved its proposed acquisition (the "Acquisition") from TransAfrika Resources Cyprus Limited (the "Vendor") of all of the outstanding shares of TransAfrika Belgique S.A. ("TransAfrika"), a private Belgian company which owns interests in three advanced exploration-stage gold deposits in central and western Africathrough subsidiaries in Rwanda, Mali and Senegal.
A Filing Statement prepared in connection with the Acquisition has been filed with the Exchange and the applicable Canadian securities regulators, and shareholders are encouraged to review the Filing Statement by visiting Desert Gold's SEDAR profile at www.sedar.com.
In accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ("NI 43-101"), technical reports relating to TransAfrika's material mineral properties inRwanda and Mali (the "Material Properties") were also filed with the Exchange and the relevant Canadian securities regulators and are accessible under Desert Gold's SEDAR profile.
Subject to customary closing conditions, Desert Gold expects to formally complete the Acquisition on or aboutNovember 28, 2011, at which time, inter alia:
- TransAfrika will become a wholly-owned subsidiary of Desert Gold;
- As consideration for the Acquisition, Desert Gold will issue 20,000,000 common shares to the Vendor and its nominees at an ascribed value of $0.75 per share. (Please refer to the Filing Statement for details concerning the proposed allocation of the Desert Gold consideration shares.) As described in the Filing Statement, Desert Gold will be required to issue a further 12,000,000 common shares, in the aggregate, to the Vendor and its nominees in the event that within a two year period from closing of the Acquisition, Desert Gold publishes an NI 43-101 compliant resource calculation disclosing that the Material Properties contain at least an additional 1,000,000 ounces of gold or gold equivalent in the inferred mineral resource category;
- the $3,712,250 of escrowed subscription proceeds from the recent offering (the "Financing") of Desert Gold subscription receipts will be released to Desert Gold, thereby allowing it to fund the recommended phase I work programs for the Material Properties. Each of the 4,949,665 subscription receipts issued in the Financing will convert automatically into one Desert Gold common share and one-half of one common share purchase warrant. (The terms of the Financing are more particularly described in the Company's press release of October 5, 2011);
- the Board of Directors and senior management of Desert Gold will consist of the following individuals: Mohd Ayub Khan, Non-Executive Chairman of the Board of Directors; Roeland van Kerckhoven, President, CEO and Director;Jared Scharf, Chief Financial Officer and Secretary; Louw van Schalkwyk, Vice-President, Exploration and Director;Theo Christodoulou, Director; Thomas R. Tough, Director; and Sonny Janda, Director. (Please refer to the Filing Statement for selected biographical information relating to each of the foregoing persons.)
About TransAfrika Belgique S.A.
TransAfrika has acquired a portfolio of advanced mineral projects in Central and West Africa the most important of which include:
Rwanda: TransAfrika, through its wholly owned subsidiary TransAfrika Rwanda Gold Ltd., has acquired 100% ownership of two exploration permits in the two main gold domains in Rwanda. These include permit No 107/16.03/05issued on 13 November 2007 covering 90,119 hectares ("ha") (Byumba) and 7,044 ha (Rusizi), and permit No 0040/16.03/05 issued on 1 September 2008 covering 14,754 ha (Nyamugali) and 684 ha (Rusizi Extension). The exploration permits lie within the Central African Kibaran Orogen stretching from Katanga, Democratic Republic ofCongo, into Uganda. The Kibaran hosts Banro's Twangiza, Namoya, Lugushwa and Kamitunga deposits with a total resource of 10.5 million ounces of gold ("Au").
Whilst Rwanda hosts a number of coltan, tin and tungsten mines as well as small artisanal gold mines, TransAfrika's Byumba Project is the first significant gold resource discovered in the country. The Byumba Project is located in the Gicumbi District in the Northern Province of the Republic of Rwanda. A diamond drilling program, comprising 33 holes for 5,183 m was carried out between July 2008 and August 2009 by TransAfrika on the Byumba Project and an inferred resource of 5,551 kt at a grade of 1.48 g/t for 265,000 ounces Au was declared for the Rubaya deposit. Mineralization is of the disseminated type and occurs in 14 parallel higher grade zones within a broad mineralized zone of up to 80 m wide and is expected to be amenable to open pit mining. Drilling tested the mineralization over a strike of 1,160 m. The Rubaya deposit is open down dip and along strike and has yet to be fully delineated.
The next phase of drilling is intended to increase the resource. To date TransAfrika has spent USD $7.6 million in exploration expenses in respect of its properties in Rwanda.
Mali: TransAfrika, through its subsidiaries and joint venture agreements, has three exploration permits (EP) focused on gold in Mali. The permits in Mali are held by TransAfrika Mali SA, a joint venture company incorporated in Maliheld 74% by TransAfrika and 13% by each of the two joint venture partners. The permits include Farabantourou, PR08/3549 covering 112 km2, Loulo-Est, PR 08/349 covering 52 km2 and Segala-Ouest, PR 09/396 covering 16 km2. The permits are underlain by Birimian volcano-sedimentary formations of the Kenieba inlier. Several world class gold mines occur within the Kenieba inlier, including Loulo, Sadiola, Yatela, Tabakoto, Segala and Sabodala. Realization of the importance of the Birimian rocks as the major source of gold in West Africa led to a series of discoveries and mine development over the last two decades in the West African countries of Ghana, Ivory Coast,Guinea Mali and Burkino Faso, leading to Ghana and Mali becoming the second and third largest producers of gold inAfrica.
The Senegal-Mali Fault Zone ("SMFZ") straddles the Farabantourou permit. Mines associated with the SMFZ include Loulo (11.5 million ounce gold resource) and Sadiola (9.2 million ounce gold resource). The Loulo-Est and Segala Ouest permits are adjacent to the Segala/Tabakoto Mines (3.32 million ounce gold resource) of Avion Gold Corp., a TSXV issuer, with gold mineralization extending from the Segala Mine onto the Segala Ouest permit. All of these mines are open pit operations with underground potential. The TransAfrika permits have potential to host similar deposits.
Since acquiring the permits, TransAfrika has conducted exploration work on these permits including soil sampling, trenching, auger drilling, IP surveys, reverse circulation ("RC") drilling and diamond drilling. On Loulo-Est, TransAfrika drilled 60 RC holes and 12 diamond drill holes on soil anomalies for a total of 8,224 m. 29 of the holes intersected more than 1 g/t Au. Intersections include values of up to 21 g/t Au over 1 m and intersection widths of up to 7 m at 1.95 g/t Au.
Between 2001 and 2003, 823 RC holes were drilled on Farabantourou for a total of 53,139 m. This drilling program was a follow-up on targets identified by geochemical surveys, aeromagnetic surveys and artisanal workings. Gold mineralization was discovered in six areas; Barani, Barani East, Keniegoulou, Dambamba, Kousilli and Linnguekoto. Significant mineral intercepts include 4 m at 9.31 g/t Au and 6m at 7.90 g/t Au at Barani East, 4 m at 5.90 g/t Au and 20 m at 1.62g/t Au at Keniegoulou, 7 m at 2.04 g/t Au and 12 m at 1.88 g/t Au at Dambamba and 4 m at 6.16g/t Au at Kousilli. Further TransAfrika drilling gave values of 1.26 g/t over 18 m. Since 2008 TransAfrika spent a total of USD $5.4 million in exploration expenses in respect of its properties in Mali.
NI 43-101-compliant technical reports for each of the Material Properties were prepared by Coffey Mining, an independent geological consulting firm. The authors Mark McKinney, Janine Flemming and Kathleen Body are Qualified Persons as defined by NI 43-101 for the purposes of this news release. Copies of the technical reports are available on under Desert Gold's SEDAR profile at www.sedar.com.
About Desert Gold Ventures Inc.
Desert Gold Ventures Inc. is an advanced exploration and development company which holds a 50% participating interest in a joint venture agreement with Kinross Goldbanks Mining Company (a subsidiary of Kinross Gold Corporation) of Toronto, Ontario in respect of the Goldbanks Mining property located in Pershing County, Nevada, USA.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within theUnited States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. All dollars in this release are in Canadian funds.
Completion of the transaction is subject to a number of conditions, including final TSXV acceptance. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in a Filing Statement prepared in connection with the transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Desert Gold should be considered highly speculative.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information on Desert Gold Ventures Inc. please visit our website at: www.desertgold.ca
This press release includes certain "forward-looking statements". All statements regarding the ability of the Company to successfully complete the Acquisition, to successfully integrate the businesses of Desert Gold and TransAfrika and to delineate new resources in proposed drilling programs are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. All statements that are not historical facts, including without limitation statements regarding future estimates, plans, objectives, assumptions or expectations of future performance, are "forward-looking statements". We caution you that such "forward looking statements" involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. Such risks and uncertainties include the inability of the Company to close the Acquisition and the concurrent financing due to the state of the capital markets and other factors, including those risk factors discussed in the Company's filings with Canadian securities regulatory agencies. The Company expressly disclaims any obligation to update any forward-looking statements except as may be required by law.
For further information:
Jared Scharf, Chief Financial Officer
Tel. (416) 662-3971
e-mail: [email protected]