Volcanic Gold Mines Inc. is pleased to report that it has entered into a binding and exclusive Memorandum of Understanding to acquire an initial 70% interest in the Seimana Project in Guinea. This interest may be further increased to 100% through additional project expenditures.
Seimana comprises four exploration permits, which together adjoin much of the western boundary of Volcanic's existing Mandiana Project ("Mandiana"), as well as the lands the Company has under option from West African Mining Associates SARL ("WAMA"), as announced by Volcanic on April 14, 2017. The acquisition of the Seimana Project will expand Volcanic's holding in the Mandiana district to almost 1,000 fully contiguous square kilometers of highly prospective Birimian terrain, characterized by widespread, linear zones of shallow artisanal gold mining.
The Seimana Project
Exploration at Seimana in 2014 and 2015 by a former option holder included the drilling of 31 reverse circulation holes for a total of approximately 3,000m of drilling over 9 of the 40 reported targets. In much the same fashion as drilling works conducted at Mandiana and WAMA -- to which Seimana is geologically similar -- these targets were derived from artisanal workings. Drilling results include:
- 4m @ 19.8g/t from 50m in hole TAMRC001
- 5m @ 2.64g/t from 61m in hole TAMRC002
- 10m @ 2.58g/t from 36m in hole KROURC001
- 5m @ 2.02g/t from 55m and 3m @ 3.50g/t from 66m in hole KROURC002
- 3m @ 5.6g/t from 26m in hole KOTRC001
- 3m @ 5.06g/t from 21m and 3m @ 3.50g/t from 66m in hole KRDRC002
The reader is advised that the above results are historic in nature and are yet to be verified by Volcanic.
Earlier works at Seimana include surface geochemical and rock-chip sampling, and broad prospecting of artisanal workings over much of the property. Mineralization at Seimana lies along strike from Avocet Mining's Resource1 of 1.99 million ounces (Measured and Indicated) and 1.02 million ounces (Inferred) of gold at the Tri-K property, located 7 km to the south of the Seimana Project. Mineralization appears to be associated with NW trending geological structures, in common with other known gold deposits within the Siguiri Basin. It is anticipated that Volcanic will include Seimana in its airborne geophysical survey program currently planned over its consolidated land package, to be followed-up by further prospecting, with the aim of defining and refining drilling targets at the Project.
1Competent Persons' Report, 31 December 2014 (JORC standards)
Pursuant to the terms of the MOU, Volcanic will make a cash payment of US$17,640 to the Seimana optionors, which is to be used to complete the renewal of the mineral tenures that comprise the Project. Subject to completion of satisfactory due diligence on title to the Seimana Project, Volcanic will have the exclusive right to earn a 70% interest in the Project by incurring exploration expenditures of US$700,000 on the Project within 18 months of the effective date of the MOU, including expenditures of at least US$300,000 within the first 6 months. Once Volcanic has acquired the 70% interest, the remaining 30% interest in the Project held by the optionors will remain undiluted until such time as Volcanic has incurred aggregate exploration expenditures of US$2M. Thereafter, the minority owners will have the right, but not the obligation, to participate in any project funding in proportion to their percentage ownership in the Project, or will be diluted proportionally.
Volcanic brings together a deeply experienced and successful mining, exploration and capital markets team focused on building a multi-million ounce gold resource in the underexplored West African country of Guinea and its neighbouring countries. Through the strategic acquisition of mineral properties with demonstrated potential for hosting gold resources, and by undertaking effective exploration and drill programs, Volcanic is seeking to become a leading junior gold resource company.
Mr. Simon Meadows-Smith is a Qualified Person as defined by "National Instrument 43-101 - Standards of Disclosure for Mineral Projects" and has approved the disclosure of the scientific and technical information contained in this news release. Mr. Meadows-Smith holds a BSc degree in geology from Nottingham University, England, and has been involved in mineral exploration since 1988, including 20 years of experience working in West Africa. He is a Fellow in good standing of the Institute of Materials, Minerals & Mining in London.