Golden Rim chases down Korongou gold project

THE BOURSE WHISPERER: Golden Rim Resources (ASX: GMR) has executed an agreement with Burkinabe company Epsilon Gold Mines to acquire 90 per cent of the Korongou gold project in Burkina Faso.

The transaction is subject to the finalisation of Golden Rim’s due diligence, although this is expected to be completed by mid-February 2013.

The project area covers 315 square kilometres and consists of the following permits:

–    Korongou Exploration Permit covering 65sqkm;

–    Gandeni Exploration Permit covering 250sqkm; and

–    Banouassi Small Scale Mining Permit, covering 1sqkm and which sits entirely within the Korongou Permit.

 

Location of the Korongou project in Burkina Faso. Source: Company announcement

 

“Korongou has been one of the most sought after gold properties in Burkina Faso,” Golden Rim managing director Craig Mackay said in the company’s announcement to the Australian Securities Exchange.

“Extensive zones of gold mineralisation have been identified and over the past decade, Epsilon has received offers from more than 20 companies to purchase the property, including offers from several of the gold majors.

“Golden Rim has chased this project for some time and is confident of its potential to quickly produce a gold resource in excess of one million ounces.”

Previous work completed by Epsilon has mapped over 70 kilometres of potential gold mineralised structures or exposed in artisanal workings within the Korongou permit, which are ready for drilling.

Golden Rim indicated Epsilon has demonstrated the grade of the gold mineralisation within these structures can be very high.

Epsilon have rock chip sample results up to 313 grams per tonne gold, while artisanal miners have been reported to have exploited gold from several small bonanza pits grading in excess of 1,000g/t gold.

Under the terms of the agreement, Golden Rim has the right to acquire a 90 per cent interest in the Korongou project for $3 million in staged cash payments to Epsilon.

A total of $2 million is payable over a period of two years.

The additional $1 million is payable upon the commencement of a Definitive Feasibility Study.

Epsilon will retain a 10 per cent free carried interest in the project until the Decision to Mine.

After this time, Golden Rim will provide loans for Epsilon to maintain its 10 per cent interest in the project.

These loans will be repayable to Golden Rim from Epsilon’s share of the profits from production.

“Further divestment of Golden Rim’s extensive portfolio of exploration permits in Burkina Faso is planned to allow the company to focus on the Korongou and Balogo projects,” Mackay said.