Advance Gold Corp. (the "Company") is pleased to announce that is has entered into an Option and Joint Venture Agreement with Aviva Corporation Ltd. ("Aviva"). Under the terms of the agreement Aviva has the right to earn at least 75% equity in three prospective Special Licences in Western Kenya namely: SL265 Bukura, SL266 Sigalagala and SL267 Rosterman.
The three licences are excisions within Aviva's existing West Kenyan Special Prospecting Licence SPL213 Siaya. They cover a total of 64km2 and include Kenya's largest historical gold mine, Rosterman, which is reported to have produced 250,000oz Au @ over 13g/t between 1932 and 1952.
The key terms of the agreement are as follows:
- Aviva will spend a minimum of $100,000 in ground on the 3 licences within 12 months.
- At the end of the initial 12 month period Aviva will make a US$100,000 cash payment to the Company to secure an option to earn up to 75% of the Special Licences.
- First Earn-in Period - Aviva can move to 51% ownership by spending a further US$0.5M on the three licences over a period of 12 months.
- Second Earn-in Period - Aviva can move to 75% by solely funding an additional US$1M over a period of 24 months.
- Once Aviva has reached 75%, the Company may elect to contribute or dilute to 10% after which Aviva may convert the Company's interest in the property to a 3% net smelter royalty.
Under the terms of an existing agreement between Aviva and Lonmin these properties fall within the designated 2km area of interest and will be offered to the West Kenya joint venture after the commencement of the earn-in period. The Option and Joint Venture Agreement is subject to final approval by the Commissioner of Mines and Geology of Kenya.
Background to the Three Special Licences
In addition to the potential in and around the old mines, prospects and artisanal workings themselves, all three Special Licences lie along regional structures that are interpreted to represent reactivated, inverted syn-sedimentary extensional fault on or close to the Kavirondian-Nyanzian unconformity. These structures, highlighted in Figure 1, are target areas considered to have potential to host gold deposits.
Recent diamond drilling by Aviva along the structural trend, at Kimingini and Bushiangala, has returned encouraging results which included visible gold in two of the holes drilled to date. Additional walk-up drill targets along the trend have now been identified at Isulu, Shigokho, Bukura and Sigalagala. Figure 2 shows anomalous stream sediment and soil geochemical data together with major structures and prospects on a reduced to pole magnetic image. The majority of gold-in soil anomalies have never been drilled.
The three Special Licences comprise a total of ~64km2 and were granted to the Company's wholly owned subsidiary Gold Rim Exploration Kenya Limited in October 2008 and renewed for a further 2 years in 2010.
The most northerly of the three licences hosts the historic Rosterman mine, which is reported to have produced in excess of 250,000oz Au at in excess of 13g/t. Rosterman was subject to significant exploration activity during the mining period up until 1952 but since then very little exploration appears to have been done. The potential for residual ore, more lodes and the value of selvedges to mined lodes justifies immediate further exploration activity.
Recent structural mapping has highlighted a major long lived structure on the northern flank of the Kakamega Dome combined with a number of occurrences of gold in stream anomalies that appear never to have been followed up.
SL Bukura 265 and SL 266Sigalagala
The southern licences, Bukura and Sigalagala, in addition to hosting numerous significant historical colonial mines and areas of active artisanal mining, lie along the western portion of the Liranda lineament known as the Bushiangala-Shitole segment. Kimingini, Busiangala, Isulu and Shitgoko all lie in close proximity to the mapped and interpreted structure. Sigalagala appears to lie on a different structure to the north of the main Liranda lineament.
Once again very little work has been completed since the 1950's. The Bukura Gold and Sigalagala colonial workings represent walk up drill targets. Stream sediment anomalies on the Bukura licence require followup as do soil anomalies on the Sigalagala licence.
Proposed Work Program
Data collection, collation and interpretation will be undertaken by Aviva upon completion of due diligence. This will be followed by ground truthing and geological mapping.
Soil/auger geochemical sampling will be undertaken to further define existing geochemical anomalies and to test strike potential, geological, structural and conceptual targets.
Walk-up drill targets within the newly acquired Special Licences exist at the Rosterman, Bukura and Sigalagala. These will be drilled tested when the diamond drill rig becomes available. Aviva expects that drilling on these newly acquired licences will take place in Q3/Q4 2011.
Jeffrey S. Ackert, Vice President, Exploration and Business Development of the Company, is a Qualified Person for the purposes of National Instrument 43-101 and has prepared or supervised the preparation of the technical content of this news release.
For additional information, please contact:
James T. Gillis, President
Telephone: (250) 314-0186
Jeffrey S. Ackert, Vice President, Exploration and Business Development
Telephone: (613) 851-7699
This news release contains certain statements that may be deemed "forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors should change, except as required by law.
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