Mar 3 2011
AFRICAN QUEEN MINES LTD. has announced that it has now entered into an Earn-in and Joint Venture Agreement, through its wholly-owned operating subsidiary AQ Kenya Gold Limited, with Kenyan private company KENYA DISCOVERY LIMITED, covering exploration, development and exploitation of the Ugunja Gold Project.
The Project is the subject of Special License No. 227 (the "License"), granted to KDL by the Commissioner of Mines and Geology in the Government of the Republic of Kenya (the "Commissioner") on September 30, 2005, which was renewed on January 5, 2011, and covers exclusive rights to prospect and explore within an area of approximately 625 sq. km in the Busia, Siaya and Kakamega areas (aka the Lakeland District) located N of the shores of Lake Victoria in Western Kenya.
The License area has been the site of significant artisanal mining and comprises low-grade metasedimentary rocks, chiefly argillites, sandstones and conglomerates. These are part of the late Archaean age Kavirondian Group. They overlie Nyanzian age greenstones which include banded iron formation (BIF) and dominantly metabasaltic lithologies. The presence of massive sulphide lenses as well as gold in quartz veins and BIF horizons is anticipated. The License abuts the Ugandan border on the W, where active gold mining continues.
Under the terms of the Earn-In and Joint Venture Agreement with KDL, the Company may earn up to an 85% interest in the Project by funding prescribed optional stages from exploration through feasibility. In addition, the Company is required to make four payments to KDL to secure its rights under the Agreement in the sum of U.S. $25,000 each commencing after the completion of Phase 1 and continuing upon completion of subsequent stages. The Company is designated as manager and operator of the Project on behalf of the joint venture partners, subject to full consultation with KDL on all material aspects of the Project. KDL has agreed to transfer the License to AQKGL upon the Company's election to proceed to Phase 3 and payment of the above rights payments. The Agreement has now been approved by the Commissioner and AQKGL's Phase 1 Work Program has also been submitted for approval.
Phase 1 of the Project, scheduled to get underway as soon as practicable, is a ground exploration program comprised of stream, soil and rock sampling, mapping, trenching, pitting and sample analysis, together with review of geophysics and historic data, as well as such additional studies as the parties shall agree. The objective of the Phase 1 Exploration Program is to assess the overall geologic structure of the License area and the likelihood of a commercially viable gold deposit within the License area, as well as to identify discreet drill targets for a Phase 2 core drilling program. The costs for Phase 1, estimated at up to U.S. $200,000, are being paid by the Company. The Company earns a 25% interest in the Project by paying all costs of Phase 1. The Project is being managed on behalf of the Company by Senior Consulting Geologist Mr. Pete Siegfried (M.Sc., MAusIMM), a qualified person.
According to Irwin Olian, CEO of the Company, "We are delighted to be expanding our presence in Kenya by moving forward with the Ugunja Gold Project in the Lakeland District, just to the North of Lake Victoria. The project is in close proximity to our new Kenya administrative headquarters in Kisumu, which is the focal point for our exploration activities in Western and Southwest Kenya including the Rongo Gold Fields Project. The geology is exciting and we have developed a strong relationship with our JV partner KDL as well as the Government of Kenya in the past few months during our preliminary studies and due diligence review. We have been welcomed by the Prime Minister of Kenya as well as the Commissioner, local mining department officials and church and community leaders in the Kisumu area. We anticipate a very positive relationship with the people of the Kisumu area and Kenya, who will share in the benefits of our success."
Source: AFRICAN QUEEN MINES LTD.