Very good royalty leverage to POG: 20 cents more per dollar, see escalation formula.
JANUARY 25, 2000
Birim Announces Completion of Gold Production Agreement
With Ashanti Goldfields
MONTREAL, QUEBEC--Birim Goldfields Inc. is pleased to announce
that it has completed its agreement with Ashanti Goldfields
Company Limited (ASL: NYSE; AHD.U: TSE), more fully described on
September 23, 1999. All regulatory approvals have been received
from the government of Ghana for the transfer to Ashanti of the
mineral rights covering an area of approximately 40 sq.km. of the
Dunkwa concessions, which includes the Mampon gold deposit.
Accordingly, in keeping with the agreement, Birim receives from
Ashanti the initial payment of US$1,500,000.
Over the next few months, Ashanti will be completing a feasibility
study on the Mampon gold zone which will address, among other
items, a reserve calculation, open-pit design and permitting
procedures. This process is expected to take about six months.
Upon completion, Birim will receive from Ashanti an advanced
royalty payment based on the number of gold ounces defined in the
feasibility study.
To date, the Mampon gold deposit contains an independently
calculated resource of 600,000 ounces. What Ashanti will
initially assess is the near surface portion of the deposit which
Birim believes represents approximately 175,000 ounces. Not
included in the resource calculation are the adjacent parallel
lenses as well as the neighboring Aboronye deposit, located 500
metres to the west. Ashanti will eventually address, within this
40 sq km. area, other mineralized prospects such as Akwaboa and
Adukrom that it believes could be economically viable and for
which Birim will receive the corresponding royalties, in the same
manner as that which is currently applicable to the Mampon
deposit. In terms of Birim's participation in a rise of the price
of gold, the agreement with Ashanti stipulates that Birim will
receive, for all recovered ounces, an additional US$0.20 per ounce
for each US$1.00 improvement in the price of gold between US$300 -
US$350 per ounce. Should the price exceed US$350 per ounce, it is
very likely that more ounces will be mined, translating into
additional royalty payments to Birim.
Following this transaction, Birim will still hold title to a 190
sq.km. area of the Dunkwa property, the wholly-owned 7,000 sq.km.
Bui belt concessions as well as the Akrokeri property, the latter
presently farmed out to the Ghanaian subsidiary of Australia-based
Dominion Mining Limited.
Much of the laborious surface work consisting of trenching, soil
and stream sampling as well as geophysical and geochemical
surveying has been completed at both Dunkwa and Bui. Birim is at
the drill-ready stage on four gold prospects at Dunkwa plus
another four at Bui, each of which can be considered as
stand-alone projects capable of hosting economic gold deposits.
Among the more immediate targets in Birim's sights are the Opon
zone located, at the southern limit of the Dunkwa property,
contiguous with Bogoso Mines Limited (Golden Star Resources/Anvil
Mining) as well as the Tombe-Parabu prospect which corresponds to
a 10 km. long gold-in-soil anomaly on the Bui concession. Birim
expects to be actively drilling from February onwards.
"The deal with Ashanti, in itself, means good growth potential for
Birim", says Denis Simoneau, President and CEO of Birim. "Adding
to this is the fact that these and additional funds emanating from
this agreement will allow us to immediately tackle several
drill-ready gold prospects on our vast mineral holdings in Ghana.
Birim will certainly be one of the most active exploration
companies in Ghana. With senior companies cutting back on their
exploration budgets and with fewer and fewer juniors in a position
to conduct exploration because of lack of funds and an unreceptive
equity market, I believe this makes Birim a very attractive
investment in such a restricted field. This surely places Birim
on a growth curve", concludes Simoneau.
Birim Goldfields Inc. is a mining exploration firm whose mission
is to explore and develop gold deposits in Ghana, West Africa.
The Company currently has 21.4 million common shares outstanding. |
