Birim Goldfields Approves Mampon Gold Deposit Feasibility Study
Monday March 31, 12:27 pm ET
MONTREAL, CANADA--Birim Goldfields Inc. (BGI: TSX) announced today that it has approved the feasibility study produced by Ashanti Goldfields on the Mampon Gold Deposit thereby fixing the amount of the advanced royalty payable to Birim. The royalty is payable by Ashanti Goldfields upon the issuance of the Mampon mining permit by Ghana's regulatory authorities. The permit will be issued following the approval of Ashanti's Environmental Scoping Study by Ghana's regulatory authorities, anticipated in 2003.
In addition, Ashanti Goldfields has agreed to immediately extinguish its three-year Birim convertible debenture deducting amounts owing under the terms of the convertible debenture against the advanced royalty thereby eliminating the related liability. The amount to be deducted from the royalty is US$543,038, which includes 18 months' interest. Ashanti Goldfields agreed to reduce the term of the interest payable to 18 month from 3 years due to previous unforeseeable delays, which have now been all but eliminated with the Government's recent approval to allow the issuance of mining permit(s) in Productive Forest Areas. The net amount of the advanced royalty to be paid to Birim will be US $1,653,422.
As previously reported, the advanced royalty is based on the number of gold ounces, deemed to be recoverable by open-pit mining, as defined within the Mampon Feasibility Study, and includes a premium equal to 20% of the amount that gold is above US $300/oz. or US $5.95/oz. The average gold price used in this calculation was US $329.77 based on the 3-month average of the London PM Fix preceding January 20, 2003, the deemed sign-off date of the Feasibility Study.
Details of the royalty payment are as follows ($US):
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Ore Type Recoverable less than 40,000 - greater than Total
Ounces 40,000 oz 60,000 oz 60,000 oz Royalty
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Oxide 34,258 $888,995 - - $888,995
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Sulphide &
Transition 74,342 $638,000 $369,000 $300,465 $1,307,465
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Total 108,600 $1,526,995 $369,000 $300,465 $2,196,460
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Upon commencement of production, additional royalties, calculated cumulatively, will be paid on a quarterly basis on all gold ounces recovered beyond the total defined in the Feasibility Study.
Also, Birim has waived Ashanti's obligation to place the amount of the royalty in escrow and, as a sign of their continuing commitment to the development of Mampon, Birim has received a one-time cash payment of US $200,000 from Ashanti.
These transactions with Ashanti Goldfields have the immediate effect of providing Birim with a strengthened balance sheet by:
- removing the short-term liability of the convertible debenture;
- adding a receivable of approximately CAD $2.5 million which, when added to the current cash position of CAD $1.7 million, brings the working capital to CAD $4.2 million.
In the field, Birim has prepared drill pads on the Mansiso gold prospect located on the Dunkwa concession where Birim retains a 90% interest in claims covering more than 30 kilometres of strike length along the Ashanti Gold Belt. Following the Mansiso programme, the reverse circulation drill will be mobilized on the large Bui project where several promising targets will be tested.
Birim Goldfields Inc. is a mining exploration firm whose mission is to explore and develop gold deposits in Ghana, West Africa. The Company has 35.1 million common shares outstanding.
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Contact:
Birim Goldfields Inc.
Denis Simoneau
President
Phone: (514) 393-8611 or 1-800-721-8611
Fax: (514) 393-1158
Email: info@birim.com
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