Kansai secures future development of Migori Gold Project in Kenyaadmin
Kansai Mining Corporation announces an arrangement that will allow the further exploration and development of the Migori Gold Project in S. W. Kenya. It has reached an agreement with Anglo-African Minerals PLC “AAM”, presently a private company whereby they acquire a 75% shareholding in Mid Migori Mining Limited in exchange for a combination of cash and shares in the Irish company and an in-ground commitment to further exploration and predevelopment of the gold project to complete a bankable feasibility study or expend up to US$5 million within a period of 3 years.
Kansai will receive cash of US$650,000 however some of this cash component may also be converted to AAM ordinary shares. In addition to the cash component Kansai will also receive 5 million new AAM ordinary shares which ultimately will represent less that a 10% shareholder position in AAM.
AAM is a producing gold company with properties located in the Republic of Guinea. The Irish company wishes to list as a public entity on an appropriate Stock Exchange as soon as market conditions make this sensible.
The Migori Gold project, which has been well documented for a number of years, is the subject of a NI43-101 compliant report filed on SEDAR which currently provides details of 4 zones of mineralization comprising a total of 1,178,000 ounces of indicated resources commencing from surface and closely defined by diamond and reverse circulation drilling in approximately 500 boreholes, some historic resources derived from sulphide tailings and calcine dumps of about 67,000 ounces from the old Macalder massive sulphide mine, and a series of additional diamond drill holes from late 2007 which have not yet been assimilated into the database as the programme was aborted midway, firstly by the non-availability of drill rigs and latterly the difficulty in raising capital in recent months.
A consequence of this latest development is that the Company’s “qualified person” in terms of NI43-101, Bruce Walsham has been invited to join Anglo-American Minerals in a non-executive director capacity to assist that company in its technical direction and thus will continue to be closely involved in the subject Migori Gold Project.
Despite several appeals to the Company’s major shareholders over the year they have been unable to respond with alternative financing arrangements. The Company is pleased to have consummated the new arrangement to move the Migori project forward. Raising additional capital has been exceedingly difficult in the current market environment and with this transaction completed the Company should be able to move forward with greater confidence on its Venezuelan project.
In a press release in July 2008 the Company made a series of statements concerning the Company’s wholly owned subsidiary company, Compania Minera Adamantine C.A. and its Natal Diamond Project in Venezuela which are in the process of clarification and completion. The Company is considering approaches to relieve the Company of the need to invest further in Venezuela and provide, in the event of successful development, Kansai’s shareholders with the equivalent of a 10% NSR.
The Company believes the Migori Agreement, the approach on the Natal Diamond Project and anticipated future sale of AAM shares to reduce its debt will dramatically clear up the Company’s financial situation and enables us to seriously consider the acquisition of other properties.
Kansai Mining Corporation is a mining and exploration company with interests in Kenya and Venezuela trading on the TSX Venture Exchange under the symbol KAN.