Massive news from Gleichen
Gleichen to acquire 78.8% of Teck’s Morelos project
Morelos, Guerrero State, Mexico
Partner: Goldcorp Inc. (21%)
* 2005 Inferred Resource of 30.6 million tonnes grading 3.3 g/t gold (3.2 million oz contained)
* Two-phase aggressive infill drilling campaign totaling 60,000 m to improve resource confidence initiated
* Scoping level environmental, social, engineering and metallurgical studies underway
2009-08-06 20:28 ET – News Release
Mr. Michael Murphy reports
GLEICHEN ANNOUNCES PROPOSED ACQUISITION OF 78.8% OF MORELOS PROJECT
Gleichen Resources Ltd. has entered into an agreement dated Aug. 6, 2009, to acquire 78.8 per cent of the Morelos project from Teck Resources Ltd. via the acquisition of Oroteck Mexico S.A. de C.V. from Teck’s subsidiaries, Teck Metals Ltd. and Teck Exploration Ltd., for a purchase price of $150-million (U.S.) and a 4.9-per-cent stake in Gleichen postfinancing. Oroteck owns 78.8 per cent of Series A shares in the capital of Minera Media Luna S.A. de C.V., holder of the concessions comprising the Morelos project.
The Morelos project is an advanced-stage gold exploration property located in the state of Guerrero, approximately 180 kilometres to the southwest of Mexico City. The Morelos project consists of a group of seven claims totalling 29,046 hectares. Teck is the operator of the Morelos project in a joint venture with Goldcorp Inc. Teck owns a 78.8-per-cent interest in the Morelos project, with Goldcorp owning the remaining 21.2 per cent. For details of the property please refer to Teck’s 2008 annual information form.
Michael Murphy, president and chief executive officer of Gleichen, stated: “Gleichen is delighted with having been chosen as the successful bidder for the high-quality Morelos asset. The transaction will transform Gleichen into a significant gold company. We look forward to working with the community and leadership to successfully develop the Morelos project.”
As a result of this company-changing transaction, Gleichen will adjust its board and add several senior and experienced mining individuals with executive, corporate and board experience. Terry MacGibbon has been assisting Gleichen during the bidding process and pending successful closing of the acquisition of Morelos, will join the Gleichen board. Mr. MacGibbon is the chairman, president and chief executive officer of FNX Mining Company Inc. In addition, Gleichen has recruited a number of highly skilled and experienced senior management persons with exploration, engineering, and operating expertise.
Closing of the transaction is expected in the fourth quarter. Closing is subject to receipt of all required shareholder, regulatory and third party consents, satisfaction of customary closing conditions, and the completion by Gleichen of a financing to raise minimum gross proceeds of $175-million (U.S.). It is expected that the financing will proceed by way of a best-efforts private placement of subscription receipts. Further details of the financing will be provided once determined.
Macquarie Capital Markets Canada and Jones Gable & Company acted as financial advisers to Gleichen and Cassels Brock and Blackwell LLP acted as legal adviser to Gleichen.
Depth By Price
Bid
Orders Volume Price
1 3,000 0.86
1 10,000 0.85
1 2,000 0.81
1 12,500 0.79
1 3,000 0.78
Ask
Price Volume Orders
0.90 20,000 1
0.93 5,000 1
0.99 3,000 1
1.00 17,000 2
1.10 5,000 1….Gleichen has passed Oromin.For now.Oromin give us something to tak about.dsh
Depth By Price
Bid
Orders Volume Price
3 106,000 0.89
1 10,000 0.88
1 20,000 0.86
1 10,000 0.85
1 2,000 0.81
Ask
Price Volume Orders
0.96 10,000 1
0.97 4,500 2
0.98 27,000 1
1.00 52,500 3
1.02 20,000 1…Looking good..but not saying to buy or sell..Ron
Caliche:
Congratulations on your Gleichen holdings, but I am buried in Oromin and don’t have
the stomach to buy another spec gold stock until I am out of Oromin. From what I remember, you bought Gleichen down around 5-10 cents, nice hit…
G1
Never mind Gleichen, something brewing with Oromin – last at $0.98 up 18%.
You beat me to it but yeah…whats up with oromin?
interesting comments from IAMGOLD press release posted yesterday. Note commnents about Oromin under “strategic initiatives” seems like more than just a stock purchase, and Oromin was listed first.
press release
IAMGOLD Corporation (TSX: IMG)(NYSE: IAG)(BOTSWANA: IAMGOLD) –
For a full explanation of results, the unaudited interim Consolidated Financial Statements, Management Discussion and Analysis, and mine statistics, please see the Company’s website http://www.iamgold.com. All amounts are expressed in US dollars, unless otherwise indicated.
IAMGOLD Corporation (“IAMGOLD” or “the Company”) today reported financial and operating results for the second quarter ending June 30, 2009, with net earnings of $44.1 million or $0.12 per share.
“IAMGOLD’s operating team continues to deliver solid results, with gold production of 249,000 ounces at lower cash costs of $437 per ounce during the quarter. We were pleased with the record production from our flagship Rosebel mine, putting us solidly in control of the production growth we’re achieving. The project development team has made excellent progress at our Essakane project which is ahead of schedule and is now expected to reach production within twelve months, adding another 340,000 ounces of gold during the first twelve months of operation to our production profile.
Key results achieved in the second quarter included, increased 2009 production guidance at decreased average cash costs; a plant expansion at our niobium mine that significantly increases the mine’s long-term cash flow and mine life plus significant investment initiatives consistent with our long-term growth strategy,” stated Joseph Conway, President & CEO.
Q2 2009 HIGHLIGHTS
– Revenues of $225.3 million
– Net earnings of $44.1 million ($0.12 per share) including an impairment charge of $9.3 million ($0.03 per share)
– Operating cash flow of $38.9 million ($0.11 per share)
– Gold production of 249,000 ounces and average cash cost(1) of $437 per ounce
– Record production at Rosebel of 104,000 attributable ounces at a cash cost of $367 per ounce
– Niobec maintains a solid operating margin(1) of $19 per kilogram
– A continued strong financial position with $479.1 million in available funds
– A 53% reduction in the frequency of lost time accidents and modified duty injuries
Second quarter gold sales of 252,000 ounces at an average realized gold price of $898 per ounce, resulted in net earnings of $44.1 million ($0.12 per share), compared to $33.2 million ($0.11 per share) for the prior year period. This result includes (net of taxes) a foreign exchange gain of $15.2 million due mainly to the strengthening Canadian dollar partially offset by an impairment charge of $9.3 million related to the acquisition costs of exploration properties in Tanzania.
Cash flow from second quarter operating activities was $38.9 million ($0.11 per share), down from $44.8 million ($0.15 per share) in the second quarter of 2008. Improvements in cash mining costs were more than offset by increased spending on exploration, and additional resources to support acquisition, development, and process improvement activities.
Gold production for the second quarter of 2009 was 249,000 ounces at an average cash cost of $437 per ounce. This compares to production of 255,000 ounces at an average cash cost of $472 per ounce in the second quarter of 2008. The Company has effectively replaced the ounces lost by the closure of the Sleeping Giant mine at the end of 2008. Removing Sleeping Giant from the comparable period would have increased revenues by $23 million or 11%. The relative increase in production at lower cash costs per ounce in the second quarter of 2009 is primarily a result of productivity improvements at Rosebel combined with royalty expense savings.
With six months of solid operating results and exceptional productivity improvements at Rosebel, the Company raised its 2009 production guidance by 30,000 to 40,000 ounces to 910,000 to 920,000 ounces at lower cash costs of between $460 and $470 per ounce (from 880,000 ounces at between $470 and $480 per ounce).
The Company’s objective to maintain high standards in health and safety continued, with a reduction of 53% in the frequency of lost time accidents and modified duty injuries, as compared to the first half of 2008.
(1) Cash cost per ounce and Unit operating margin per kilogram of niobium for the Niobec mine are non-GAAP measures. Please refer to the Supplemental Information attached to the MD&A for reconciliation to GAAP measure.
2009 Expenditures Fully Funded – Balance Sheet Remains Strong
The Company’s cash, cash equivalents and gold bullion (at market value) position remains very strong with $394.8 million in available capital, at June 30, 2009. In addition, the availability under the credit facility at June 30, 2009 was $84.3 million, for a total of $479.1 million of available funds.
Financing activities during the quarter included an equity financing, where the Company issued 1,379,310 flow-through common shares at C$14.50 per share to raise $17.5 million specifically relating to the Westwood project; as well as filing on July 29, 2009 a final base shelf prospectus allowing the Company the financial flexibility to execute on its aggressive growth strategy.
Capital expenditures in the quarter were $144.1 million, with the majority relating to construction of the Essakane and Westwood development projects and mining fleet improvements at Rosebel.
In 2009, full year capital expenditures are now projected at $448.4 million, up slightly from the previous estimate of $439.5 million. The change is mainly due to the earlier purchase of the Rosebel mining equipment.
With $479.1 million in available funds, the Company is well funded for the development and exploration of its pipeline of gold projects.
Rosebel Mine – Record Production and Cash Costs
At the Rosebel mine in Suriname, the recent mill expansion came into full effect during the second quarter as the mill operated at above its nameplate capacity of 11 million tonnes per annum achieving record mill throughput 44% higher than the prior year period and 18% higher than the first quarter of 2009. This resulted in record production of 109,000 ounces (on a 100% basis) in the quarter, an increase of 38% over the prior year period.
In addition, the new and enhanced mining fleet, revised pit design and increased operating efficiencies combined to achieve significantly increased mine production.
The higher gold production at Rosebel combined with royalty expense savings were key contributors to the 24% decrease in average cash cost to $367 per ounce versus the same period in 2008.
Doyon Division Mines – Mine Life Extended and Cost Controls Continue
At the Doyon division mines in Quebec, production remained at similar levels to the prior year period, despite the mines approaching their end of life, with lower cash costs due to the strengthened US dollar (relative to the Canadian dollar) and lower royalty expenses. The royalty expense decreased by $75 per ounce, primarily as a result of the acquisition of the participation royalty in 2008 that eliminated the royalty obligation on production from the Doyon mine and the Westwood project.
Due to better than expected results the Doyon life of mine has been extended into the fourth quarter of 2009, from the originally planned May 2009. The Mouska mine is now expected to operate into at least the second quarter of 2010.
Niobec Niobium Mine – Extended Mine Life and Increased Long-Term Cash Flows
At the Niobec niobium mine in Quebec, margins remain strong. Niobium production for the second quarter was 0.9 million kilograms, compared to 1.0 million kilograms in the second quarter of 2008. The decrease in niobium production was a result of lower tonnage hoisted and processed and lower grades and recoveries, due to a higher silica content in the stopes being mined. Stope sequencing has been modified to include higher grade stopes for the second half of 2009.
The second quarter operating margin of $19 per kilogram of niobium increased by 27% compared to $15 per kilogram in the prior year period. This was primarily a result of an increase in the niobium price.
In June 2009, the Company approved a mill expansion and paste backfill plant addition for Niobec. The mill expansion will increase mill throughput by 24%. Construction of the mill expansion began in June 2009 and is estimated to be completed during the third quarter of 2010. The paste backfill initiative will enable near complete extraction of the ore body at lower levels of the mine by using mill tailings mixed with binding material significantly reducing the need for natural ore pillars. The paste backfill plant approval has allowed an increase in proven and probable reserves by 36% and inferred resources by 72% (as previously announced on February 23, 2009). Construction of the paste backfill plant and associated underground infrastructure began in June 2009 and is estimated to be completed during the second quarter of 2010.
Essakane Project – Commercial Production Now Expected in August 2010
At the Essakane project in Burkina Faso, construction is ahead of schedule with commercial production now scheduled for August 2010. The project is expected to contribute an estimated 340,000 attributable ounces of gold in its first twelve months with lower than life-of-mine production costs.
In June 2009, the Company announced an updated gold reserves and resources statement for Essakane (on a 100% basis) with an increase of 8% or 245,000 ounces in probable reserves to 3.37 million ounces. This updated reserve and resource statement has been calculated from a new block model based on a gold price of $700 per ounce and an oil price of $70 per barrel.
The Company is working on a new mining schedule and operating cost estimate based on the new block model and pit design. The development team is proactively looking to advance the project schedule and identify capital cost savings opportunities while maintaining the IAMGOLD standard for safety and security.
Westwood Project – Shaft Sinking Commenced
At the Westwood project in Quebec construction is on schedule. In June 2009, the Company announced an increase in the resource base and that shaft sinking had commenced. The revised estimate identifies an inferred resource of 9.4 million tonnes of mineralization at an average grade of 11.4 g/t Au containing 3.4 million ounces of gold using a 6.0 g/t Au cut-off grade. This revised resource estimate shows a 17% decrease in tonnage (due to reduction of the minimum width from 3 metres to 2 metres and reinterpretation) and a 31% increase in grade, generating a 9% increase in gold ounces from the previous undiluted resource estimate released in July 2008 using a 4.0 g/t Au cut-off grade. Indicated resources for a sector of the Zone 2-30 and the Warrenmac deposit are in addition to the resources mentioned above.
As a result of the Company’s aggressive development plan, a revised scoping study for the project is expected to be completed during the fourth quarter of 2009. Additional information gathered from the delineation program has improved the geological model, and will be used in the study.
Quimsacocha Project – Ready to Resume Development
In May 2009, the Government of Ecuador issued new transitional regulations to expedite the resumption of mining activities pursuant to the new Mining Law passed in the first quarter of 2009. As of the end of the second quarter of 2009, the Company has fully complied with all requirements under the transitional regulations and is awaiting the delivery of an authorization from the Mining Ministry to recommence mining activities.
During the second quarter of 2009, the Company continued with advancement of engineering for the concentrator. The Company intends to resume drilling and other feasibility work at Quimsacocha immediately upon receipt of the authorization, with the final feasibility study expected to take twelve months to complete at a cost of $14 million.
Exploration and Development – Aggressive Organic Growth
The second quarter of 2009 exploration activities and new projects focused on the Company’s keys areas, namely West Africa, the Guiana Shield, Brazil and the northern Andean regions of South America, and Quebec.
The 2009 emphasis continues to be acquisition of advanced exploration projects, resource development, resource conversion at Rosebel (drilling of 90,000 metres), and progressing the portfolio of greenfield projects. In addition, over 140,000 metres of drilling is planned on projects. Planned exploration expenses in 2009 are totaling $54.2 million of which $34 million is for greenfield exploration initiatives.
On July 27th, 2009 the Company provided an update on exploration activities. In the second quarter of 2009, the Company incurred $127.6 million on exploration and development stage projects compared to $17.6 million in the second quarter of 2008. The total includes greenfield exploration, near-mine exploration, and development stage projects in the Company’s development pipeline.
Strategic Initiatives
Investment in Oromin Explorations Ltd.
In June 2009, the Company acquired a 17% interest in Oromin Explorations Ltd. (“Oromin”) for $10.3 million. Oromin is a TSX listed company with a joint venture in a property covering a large landholding in Senegal in close proximity to the Sabodala gold mine.
Option and Earn-in agreement on the La Arena project
In June 2009, the Company received a 10.6% interest in Rio Alto Mining Limited (“Rio Alto”)(2) following an option and earn-in agreement related to the sale of the La Arena project in Peru.
Rio Alto has the option to purchase all of the shares of La Arena S.A., an IAMGOLD wholly-owned subsidiary, for a cash payment of $47.6 million. During the option term of two years (which may be extended by 18 months through the payment of additional fees), Rio Alto may also earn-in newly issued shares of La Arena S.A. up to a maximum of 38.7% by incurring up to $30.0 million in expenditures on the La Arena project. Rio Alto can partially exercise the option and purchase shares currently held by IAMGOLD during the option term to a maximum 49% of the outstanding shares of La Arena S.A.
(2) Rio Alto was subsequently acquired by Mexican Silver Mines Ltd. who then changed its name to Rio Alto Mining Limited.
Buckreef, Tanzania
In consultation with the Tanzanian Government, the Company took steps to terminate the Buckreef Joint Venture Agreements. Exploration activities were suspended earlier in the year as part of a strategic reorientation of the Company’s exploration focus. Transactions contemplated for the sale of the Buckreef project did not meet the Company’s valuation criteria and the Company has decided to relinquish the associated properties. The Company has enjoyed a close working relationship with the Tanzanian Government, and community relation initiatives will be completed as part of IAMGOLD’s commitment to the local villages at Buckreef. Closure of IAMGOLD’s Tanzanian exploration offices is expected to be completed in the fourth quarter of 2009. This resulted in a second quarter of 2009 impairment charge of $9.3 million related to the carrying value of the exploration properties in Tanzania. Upon completion of the surrender of Buckreef there will be a reduction of measured resources of 212,000 ounces, indicated resources of 573,000 ounces and inferred resources of 727,000 ounces from the Company’s reserve and resource statement.
The Company is also in advanced stages of talks concerning the outright sale of the Company’s interest in the Kitongo project. Upon the completion of the sale of Kitongo there will be a reduction of inferred resources of 291,000 ounces from the Company’s reserve and resource statement.
Depth By Price
Bid
Orders Volume Price
1 10,000 0.93
1 3,000 0.91
1 3,000 0.90
2 12,000 0.85
1 5,000 0.84
Ask
Price Volume Orders
0.98 3,000 1
0.99 1,000 1
1.00 13,000 3
1.01 3,000 1
1.05 6,000 2…Oromin depth 12:06 Vancouver time..Looking good.dsh
I wonder if they are planning a Friday night NR. Possible, but it would be strange unless
it was a long weekend. Is there a holiday in Canada on Monday?
Why would that be strange and otherwise require a longer weekend?
Congratulations on your Gleichen holdings, but I am buried in Oromin and don’t have
the stomach to buy another spec gold stock until I am out of Oromin. From what I remember, you bought Gleichen down around 5-10 cents, nice hit…
Hi if I remember right GRL had a rollback along the way?Also remember how long we have held this stock along with our Oromin.We all deserve a payoff.Good luck to all GRL & OLE share holders.Remember always do your own homework..I for one am accumulating a couple others for the future.dsh
Interesting Post below I saw another Site….
I add,,, will IMG be friend or Foe?
It is IAMGOLD that is dragging Oromin higher (what brokers call the “halo” effect). IMG announced on Wednesday that they made $44 million profit in the last quarter and the stock was up 10% in the last two days. They are covered by 21 analysts, and all of those analysts now have Oromin on their radar. OLE closed higher on volume in the last half hour of trading on Friday, something it has not done in the last 4 1/2 years. IMG is in the process of raising $700 million. It is likely that most of that money will be used to buy out MDL and the other 83% of OLE that they don’t already own. I expect an offer in the next 4-6 months. More to come.
So that means they would buy Oromin for less than $7? I hope not! If they do buy it, would it likely be cash and stock? I could live with $10 cash and $10 worth of their stock.
Mallard:
Although I would definately take it. I think $20/share is way off. I think we are looking
at $5-7, unless the prefeas and additional drilling shows a lot more ounces then maybe
$10… Just my opinion though, we should know alot more by the end of the month… I hope!!!
G1
Caliche:
I am through wasting my time talking to DS as I feel he is worthless. I am not sure who you spoke to at the office, but did they give you any indication other than 50/50 before/after August 15th, as that is not too much help. Is SRK doing the prefeas and do you still have contacts there?
G1
Don’t expect the prefeasibility study to be released on time and you won’t be disappointed. Given management’s history of not meeting deadlines, a reasonable person would spare himself a lot of anxiety if he planned on a date sometime in the first two weeks of September rather than the last two weeks of August.
srk is doing the pre feas and i doubt i will be able to get any better idea than august..they are just as unwilling to give a deadline in case they miss it .. i will do some digging..
remember oromin has the poison pill in place to fend off any unwanted takeover .. if IMG steps out of line it could be used on them too ..
so i would venture they will remain friend ..
having said that nothing gets shareholders a fair price better than a bidding war ..
I am going to hold to 10 Mil. Ounces at $300 = $20 a share. More if the price of gold increases and/or total ounces increases.
Excuse me Caliche, but not all of us are longterm holders. I don’t quite understand what you mean with ‘holding the poison pill’?
Could you elaborate please?
good question.. sorry i wasnt clear..What Does Poison Pill Mean?
A strategy used by corporations to discourage a hostile takeover by another company. The target company attempts to make its stock less attractive to the acquirer. By purchasing more shares cheaply (flip-in), investors get instant profits and, more importantly, they dilute the shares held by the competitors. As a result, the competitor’s takeover attempt is made more difficult and expensive.
basically if there is a hostile bid oromin will issue existing shareholders more shares at a chaep price diluting the hostile companies shares and giving us more profit.. i have never seen it actually in effect.. usually the threat is enough to dissuade a takeover
Nice 🙂
I understand. Thnx for clarifying that.
Caliche, I really appreciate all that you do for investers like me. What a great web site you have created. If you have the time to respond, I have a question concerning Oromin stock value. I have a large number of shares (6 figures) of Oromin and I have heard many different thoughts on value when we sell. Could you give me a ballpark number of what you feel is going to be a fair range of value for Oromin when they sell off the stock? Thanks again.
Mallard:
Good thinking, but take your 10 million shares and divied it by 42% and you are
back to $7 or so…
G1
Seems strangely quiet this morning…..Almost 11:30 eastern time and no shares traded yet……..Not even a bid/ask post by dsh on Ole…….Did I mis something????…..
My mistake isn’t the 42% of 10 Million, itt is using 65 million shares versus 94 million that are issued now. Using 94 million shares would give one $13.40 a share. The formula I used was previously posted by Caliche.
Mallard / Goldn1——–I agree…it was Caliche’s mistake………….LOL
OK 10Million ounces X $300 = 3 Billion X 42% = $1.26 billion divided by 94 million shares = $13.40 What am I missing? Caliche has stated that he feels this is a 10 to 13 million ounce property. I rest my case.
Mallard…….Glad you are so optimistic and what you say may turn out to be true…..I , for one , surely hope so………..However, I would probably use the fully dilluted # of shares which is 104 million……but still gives you a $12 share price…
I know that i am very optimistic but hey, it sure would pay well!!!!!
Mallard——-Actually , I believe the fully dilluted # of shares is 104.3 million plus the 3.9 Ole issued to themselves as options in late July…….Total now more like 108.2 million shares…..Sorry for my error…….
Mallard, is the $300.00 an ounce a possibility for our share of the gold? Thanks!
All this talk for a buy out at $10-13 bucks a share sounds great, but last I checked
the share price is between $.85-.95 cents and after having been in this stock speculating about buy outs for years, here will sit at under a buck. I am a bit surprised at the low volume and no run up in anticipation of the prefeas coming out similar to that with SR. I am hoping the prefeas has a better result than SR as my blood pressure can’t take more bad news from this company.
I know I am old and sometimes forget, but has Oromin ever gave us a surprise on the upside with an NR? I hope the prefea will be a first of many more to come…
G1
IAMGOLD IS BUYING UP AFRICA AND UP OVER 300% THIS YEAR. i HOPE OROMIN IS NEXT…
IAMGOLD & Avnel Gold Announce Option Agreement on the Kalana Gold Project
Press Release
Source: IAMGOLD Corporation
On Tuesday August 11, 2009, 8:00 am EDT
Buzz up! 0 Print.Companies:IAMGOLD Corp.
TORONTO, ONTARIO–(Marketwire – 08/11/09) – IAMGOLD Corporation (“IAMGOLD”) (TSX:IMG – News)(NYSE:IAG – News)(BOTSWANA: IAMGOLD) and Avnel Gold Mining Limited (“Avnel”) have entered into an option agreement (the “Option Agreement”) whereby IAMGOLD has the option to acquire up to an initial 51% interest in Avnel’s 80% interest in Societe d’Exploitation de Mines d’Or de Kalana (the “Kalana project”) in Mali, West Africa. All amounts shown are in US dollars unless otherwise indicated.
Related Quotes
Symbol Price Change
IAG 11.95 +0.13
{“s” : “iag”,”k” : “c10,l10,p20,t10″,”o” : “”,”j” : “”} The Kalana project is located in southwest Mali and consists of the Kalana Gold Mine, an operating underground gold mine and an exploration property covering 387.4 km2 with a 30 year mining exploitation permit (the “Permit Area”). The Kalana project is owned by Avnel (80%) and the Malian Government (20%). The property has a developed mine site consisting of a small underground mine operation exploiting narrow, high-grade, quartz veins. The agreement announced today provides the opportunity to explore the potential for a sizeable bulk mining operation at Kalana, drawing on IAMGOLD’s expertise and experience with similar operations in West Africa.
Michael Donnelly, Senior Vice President of Exploration at IAMGOLD stated, “Kalana represents an outstanding opportunity for IAMGOLD to explore a strong gold mineralized system with the view of realizing the large-scale, bulk mineable potential. Opportunities of this nature are few and far between and Kalana is a natural fit with IAMGOLD’s long-term strategic objectives to develop a strong pipeline of projects in our focus areas of West Africa, Quebec, and the Guiana Shield.”
The Option Agreement provides IAMGOLD the opportunity to earn an initial 51% interest in Avnel’s share of the Kalana project by spending US$11,000,000 on exploration activities over a three year period and by delivering a NI 43-101 resource calculation of at least 2 million ounces of gold as well as proceeding with a Feasibility Study. IAMGOLD has the option to increase its interest from 51% to 65 or 70% upon delivering a Feasibility Study that supports the development of a gold mine. In connection with entering into the Option Agreement, IAMGOLD will pay Avnel $1 million in cash and Avnel will issue IAMGOLD warrants to acquire up to 2 million common shares of Avnel at an exercise price of C$0.45 per share.
Howard Miller, CEO of Avnel issued a statement that “This agreement represents a significant milestone in the development of Kalana and fulfills our goal to advance the project into a large scale bulk mining operation, as well as further exploring the large geologically prospective Permit Area. We believe that working together, IAMGOLD and Avnel have the capability to fully explore the upside potential at Kalana. This partnership leverages Avnel’s considerable investment in the project to date and will benefit both of our shareholders through IAMGOLD’s extensive West African expertise.”
There has been a long history of gold exploration and mining on the Kalana project that focused on rich, narrow, shallow-dipping quartz veins that occur within a broader mineralized system. This broader system, and other satellite zones on the property, have not been evaluated in systematic detail and will be the focus of IAMGOLD’s exploration program. IAMGOLD is planning to carry out an initial $2.5 million drill program in the first year of the agreement that includes at least 6,500 metres of drilling. This initial program will be designed to test the extent and nature of gold mineralization in the halo of high grade veins that are currently being exploited at the Kalana Gold Mine, as well as other mineralized structures in the mine area.
ABOUT AVNEL
Avnel is a gold mining producing company operating the Kalana Gold Mine and is engaged in the exploration of the Kalana Exploitation Permit and Fougadian exploration permit.
Avnel’s principal asset is an 80% interest in Societe d’Exploitation des Mines d’Or de Kalana (“SOMIKA”). SOMIKA is the holder of a 30 year exploitation permit at the operating Kalana Gold Mine in south west Mali. Avnel also holds the Fougadian exploration permit covering an area of 150 sq. km. which lies to the south of the main Kalana exploitation permit.
ABOUT IAMGOLD
IAMGOLD is a leading mid-tier gold mining company producing approximately one million ounces from 7 mines on 3 continents. They are focused on growth and have a pipeline of development and exploration projects. IAMGOLD is uniquely positioned, with a strong financial base, together with the management and operations expertise to execute on their aggressive growth objectives. IAMGOLD’s regions of focus include West Africa, the Guiana Shield of South America and Quebec, Canada. IAMGOLD continues to assess accretive acquisition opportunities with a strategic fit. IAMGOLD is listed on the Toronto Stock Exchange (“IMG”), the New York Stock Exchange (“IAG”) and the Botswana Stock Exchange.
I believe the stock is way undervalued right now due to market conditions. In a good market it should be trading around $5/sh. I also believe that OLE has a minimum of 10 M oz. and have read that it costs approx. $450/oz. to get out of the ground (can anyone confirm this?). If that is the case, wouldn’t this make more sense? 10M oz. x $500 = $5B x 43% = approx. $20/sh. If the oil is there, we are off the charts.
What am I missing?
Goldn 1—–I fully believe that Ole does have the potential for some very pleasant surprises in the near term future……….The 2.26 million ounces of previously announced inferred resources was based on drilling through Dec 8 , 2008 and many drill holes have been added since then…….Also , Kerekounda was only included for 100,000 ounces in that report with the rest of the 2.26 million ounces from Masato , Golouma West , and Golouma South….Kerekounda alone should add many , many more ounces…….Plus no ounces have yet been added for Maki Medina , nor for Niakafiri ,(both announced as gold discovery deposits) , nor for the new discovery 1 km south Kerekounda(unknown name)…..nor for any other areas…I just don’t know how much Ole will really tell us in the PF but , again , they have the potential to give us a number of very pleasant surprises in the very near term future…Yes , I also believe the potential is there for much more than five million ounces property wide…As for 10 million ounces , not impossible IMO…..but will require much more drilling and time and $$$$$$$..(and dillution)…A bidding war is our best possibility…Comments , anyone???
Depth By Price
Bid
Orders Volume Price
1 2,000 0.90
1 10,000 0.85
1 10,000 0.84
2 18,000 0.83
2 15,000 0.80
Ask
Price Volume Orders
0.90 2,000 1
0.94 5,000 1
0.95 2,000 1
0.99 3,500 2
1.05 6,000 2…..Morning 5:51 depth Vancouver time.dsh
Depth By Price
Bid
Orders Volume Price
1 1,500 0.84
1 3,000 0.83
3 18,000 0.80
2 10,500 0.79
1 2,000 0.78
Ask
Price Volume Orders
0.92 5,000 2
0.93 12,500 2
0.94 5,000 1
0.95 2,000 1
0.98 5,000 1…Depth Vancouver time 6:54.dsh
we indeed have movement again at oromin.
lets see if we get a friday night release. That would be before the 15th of august. I know some of the posters here think of this as a possibilty?
Goldchaser,
Not going to happen by the 15th…
G1
Shernan- I arrived at $300 from one of Caliche’s posting.
Thanks Mallard for that info.
It would be nice to know how the price of gold, say at $900 an ounce, brakes down.
Mallard:
Take a look at the costs for MDL our neighbor. But remember, they have a $100 million plant on property. I think it is pretty east to assume that whoever buys Oromin will buy MDL for the plant…
G1
Gold Production Statistics
Jun 2009 Mar 2009
Quarter Month
Ore mined (‘000t) 854 155
Total mined (‘000t) 2,846 1,402
Ore processed (‘000t) 575 132
Head grade (g/t) 3.27 2.60
Gold recovery (%) 93.8 91.0
Gold produced * (oz) 58,943 3,534
Cash cost per oz # US$/oz 350 n/m
Gold sold (oz) 52,325 nil
Average price
received
US$/oz 878 nil
* Gold produced is gold poured and does not include gold-in-circuit at
period end
# Cash costs do not include royalties which totalled US$23/oz
n/m = not meaningful due to commissioning during the month
Thankyou Goldn1.
FYI, Oromins listing on the SEC might not be too far off…
Just what I hear…
G1
What will that do for us?
hey G1
pardon my ignorance but what is the SEC?
is that a more senior listing in the us?
cheers!
caliche
Caliche, do you have a gut feeling on PF report total gold in ground? Thanks, Sherman
I thought that was Securities & Exchange Commission
Doublem2
Depth By Price
Bid
Orders Volume Price
2 18,000 0.85
1 1,500 0.84
2 8,000 0.83
1 5,000 0.82
1 7,500 0.81
Ask
Price Volume Orders
0.88 10,000 1
0.89 5,000 2
0.90 2,500 1
0.92 2,500 1
0.93 10,000 1…Depth Vancouver time 7:30.dsh