D'Aguilar Gold Limited (ASX:DGR) Quarterly Report June 2010
The potential tenement portfolio of "Carlin" style gold projects in subsidiary Navaho Gold Pty Ltd has expanded markedly in recent months. Apart from the steady grant of exploration permits on the previously advised three major project areas in Queensland (Georgetown, North Bowen and Texas) Navaho is currently negotiating option agreements to acquire up to seven key properties in the Battle Mountain and Carlin areas in Nevada, USA; two of which are within sight of existing multi-million ounce gold mines, operated by Barrick and Newmont. All of the Nevada properties can be rapidly advanced for short-term drill target definition. Work has commenced on preparation of a Navaho Gold prospectus, with a target of proceeding to IPO and listing on the ASX later this year.
On 29 June the Directors of D'Aguilar Gold and its 86% owned iron and titanium focussed subsidiary Ridge Exploration Pty Ltd announced that agreement had been reached for a scrip-based take-over of Ridge Exploration by TSX.V listed Canadian company Coltstar Ventures Inc.(CVE:CTR). Upon completion of the take-over D'Aguilar will emerge with approximately 23% of Coltstar, with a Director appointed to the Coltstar Board.
At current market values on TSX.V at 23 July 2010 for Coltstar the sale values Ridge at approximately A$9.35M (net D'Aguilar A$8.05 M). Coltstar is focussed on world class iron ore projects in Canada and Australia, but also holds highly prospective gold projects in Italy.
The Board was pleased to announce the appointment of Mr John Downie, an experienced mining industry executive of more than 30 years and former CEO of Gladstone Pacific Nickel (LON:GPN), as CEO designate of AusNiCo Limited (ASX:ANW). The prospectus for the IPO and subsequent listing of AusNiCo on the Australian Stock Exchange was lodged with the Australian Investment and Securities Commission on 15 July 2010. The issue is expected to open shortly. A priority allocation of shares has been reserved for D'Aguilar Gold Limited shareholders.
AIM listed Solomon Gold Plc (LON:SOLG) in which D'Aguilar holds a 15.6% interest has been undertaking a substantial drilling program on the Queensland tenements acquired from D'Aguilar in early 2010, and has released a maiden resource statement of an inferred 200,000 ounces of gold from the Crunchie Prospect. Solomon Gold has announced an ambitious target of delineating one million ounces in gold resources by Christmas 2010.
On 25 June D'Aguilar Gold announced the successful completion of a $1.475 million capital raising. Together with the $1million convertible note with Solomon Gold, exploration refund of $550,000 from AusNiCo, and the market value of investments in listed or soon to be listed entities (Mt Isa Metals, Solomon Gold, AusNiCo and Ridge), and excluding any value for Navaho Gold, Barlyne Mining, Anduramba Molybdenum, the new energy subsidiary and other projects including Bathurst and Alexander Creek, the net assets of D'Aguilar are approximately three times the current market value ascribed to D'Aguilar.
Copper and Gold-Mt Isa & West Africa
Following an IPO and ASX listing in August 2008 D'Aguilar Gold holds 50M shares representing 48.2% of Mt Isa Metals and escrowed until 20 August 2010.
At the current price (23 July) of 18 cents the market value of this investment is $9.0Million. Today MET holds strategic land positions in two world-class mineral provinces: the Mt Isa Inlier in Australia and the Biriman Gold Province in Burkina Faso, West Africa.
In the Mt Isa Region MET holds 3,800km2 of tenements in four projects areas focussed on copper and copper-gold targets (see Fig 1 over page). The first two drill holes completed at Gregory (IOCG copper-gold target under significant cover) have revealed significant iron oxide alteration and a "live" copper system. The current focus is on the Leichardt project area where drilling is in progress and an initial resource has already been announced. Leichardt contains multiple near surface copper targets, including Barbara North, Green Zone, North Gossan, Blue Star and Trey Bit. The company has recently announced the commencement of a helicopter-borne geophysical survey over the Barbara permit area to fast track identification of "hidden" copper-gold targets, including testing the extension of structures already identified. High priority targets are expected to be drilled by year end.
West Africa is a world class gold province, host to more than fifty +1 million ounce gold deposits associated with the Birimian Greenstone (with close geological similarities to the greenstone belts of the Eastern Goldfields of Western Australia). MET has recently secured exploration permits with a total area in excess of 5,000 km2 in Burkina Faso - an under-explored country that has a recent history of stable government with a modern mining law (see Figure 2 over page). The MET "footprint" in Burkina Faso covers an area equivalent to holding all the Eastern Goldfields of Western Australia from west of Coolgardie, and bounded by Paddington in the north and Junction to the south - an area comparable to all other listed Australian explorers in Burkina Faso combined (including Ampella Mining (ASX:AMX) (PINK:APMZF), AusQuest (ASX:AQD) (PINK:AUQSF), Blackthorn Resources (ASX:BTR), Carbine Resources (ASX:CRB), Gryphon Minerals (ASX:GRY), Gold Rim Resources (ASX:GMR) and Vital Metals (ASX:VML)).
MET commenced exploration in Burkina Faso in June and has already announced some exceptional gold assay values from initial rock sampling on several prospects highlighted by a 3.5km strike length of multiple high grade quartz lodes on the Nabanga Prospect. MET has announced a proposed exploration budget of $3million for 2011, with initial focus on mapping, rock chip sampling and drilling on artisanal gold sites. Once field work is able to commence in earnest at the conclusion of the current wet season a significant news flow is anticipated.
Carlin Style Gold - Queensland and Nevada, USA
Navaho Gold is a 60% owned subsidiary of D'Aguilar Gold with a clear strategy focussed on "Carlin Style" gold mineralisation. "Carlin Style" gold mineralisation was typed near the town of Carlin in Nevada USA in the early 1980s. It occurs as the result of low temperature solutions precipitating gold, silver and sulphide minerals in limey, magnesian and carbonaceous sediments, which have first been made porous by acid solutions emanating from nearly intrusions and fragmentation from fault activity. The mineralisation occurs in long structural corridors known as trends, such as the famous Carlin and Battle Mountain - Eureka trends, which host in excess of 200 million ounces of gold as past production and current resources. The trends are important features which are the focus of the intrusions, faulting and mineralisation on the faulted margins of a sedimentary basin. This model is regarded as a holy grail for gold explorers all over the world. Importantly the world's largest gold deposits are located in sedimesedimentary basins.
The company has identified a large scale opportunity for the discovery of low temperature high faulting gold deposits in unexplored margins of sedimentary basins in Queensland. As announced, Navaho Gold now holds 6 granted EPMs and 20 EPM applications covering more than 7,000km2 in southern, central and northern Queensland on three major project areas at Texas, North Bowen and Candlow (Georgetown). Location of these tenements is shown in Fig 3.
Navaho is currently negotiating options to acquire up to seven key properties in the Battle Mountain-Eureka and Carlin areas in Nevada, USA. As shown on location plan Fig 4, several of these properties are potentially on trend and within visible site of existing multi-million ounce mines operated by Newmont and Barrick. All of the Nevada properties can be rapidly advanced for short-term drill definition Work has commenced on preparation of a prospectus for Navaho Gold, with a target of proceeding to IPO and listing on the ASX later in 2010.
Iron, Titanium and Aluminium - Queensland
During the quarter Ridge Exploration lodged eight new exploration permit applications in the Maranoa District of Queensland after a detailed review of previous exploration work in the Evergreen and Westgrove Iron formations on the northern edge of the Surat Basin. The location of the new applications with iron assay results of surface exposure over geology is shown on Figure 5.
The new exploration permit applications means that Ridge now holds more than 1,100 km2 of granted tenements and over 4,400 km2 of applications in process.
The permits stretch over 350 km and cover the majority of the interpreted prospective iron bearing ground. The location of all Ridge exploration permits in Queensland is shown on the following page in Figure 6.
Iron, Titanium and Aluminium - Queensland
On 29 June the Directors of D'Aguilar Gold and its 86% owned iron and titanium focussed subsidiary Ridge Exploration Pty Ltd announced that agreement had been reached for a scrip-based take-over of Ridge Exploration by Canadian company Coltstar Ventures Inc (TSX.V: CTR).
Under the Share Purchase Agreement, Coltstar will acquire 100% of the issued shares in Ridge, in consideration for the issue of 10 million new, fully-paid shares in Coltstar to the Ridge shareholders.
Following the transaction, Coltstar will have approximately 38 million fully-paid shares on issue, together with approximately 5.57 million convertible equity instruments (options and warrants) and CDN$150,000 worth of convertible debentures. Coltstar has recently finalised a capital raising giving the company approximately CDN$1.5 in working capital.
Ridge shareholders will hold approximately 27% of Coltstar following the transaction (approximately 23% on a fully diluted basis). As the majority shareholder of Ridge, D'Aguilar will hold approximately 8.6 million shares in Coltstar following the transaction (approx 23%), valuing the deal at approximately $AUD 9.35 million dollars based on the current Coltstar price of CDN$0.85 and an exchange rate of $1AUD = $CDN0.90.
D'Aguilar will appoint a Director to the Coltstar Board, and will continue to provide managerial and administrative support to Ridge on commercial terms.
D'Aguilar and Coltstar are currently expediting the appointment of a Chief Operating Officer for Ridge to lead the further exploration and metallurgical programs.
Under the terms of the transaction, D'Aguilar has agreed to be restricted from involvement in projects, companies and investments which are primarily focussed on iron-ore for a period of five (5) years in Australia (Restriction Period). D'Aguilar is also bound to direct any such project or investment opportunities to Ridge (under the ownership of Coltstar).
In the event that Ridge, or its assets, are disposed of by Coltstar during the Restriction Period, D'Aguilar may elect to be released absolutely from all such restrictions, or - as compensation for continuing to be restricted - be granted a 1.25% NSR on future production from the iron ore assets acquired as part of this transaction, and where the disposal is effected by way of an initial public offering of Ridge or other entity holding the iron ore interests (Listed Entity), a further 2 million shares in the Listed Entity and warrants to purchase 10% of the capital of the Listed Entity.
Coltstar Ventures Inc was established in 2006 and is based in Vancouver, Canada. Coltstar is a Tier 2 TSX Venture Exchange listed company headed by CEO Damien Reynolds. As part of its focus on world-class iron-ore projects, Coltstar has recently announced the staking of a 958km2 tenement area contiguous with Chevron Canada Limited's Crest iron deposit which is incorporated within a 600km2 area straddling the Yukon - Northwest Territories border in Northern Canada.
Through its subsidiary, Tuscany Minerals, Coltstar is also focused on the acquisition, exploration, and development of gold properties in Italy. Its principal property includes the Colline Metallifera gold property, which consists of six exploration permits located in Tuscany, Italy.
Coltstar recently announced that a silt sampling campaign has expanded a large, gold-in-silt anomaly on its Torniella Property in central Italy. This anomaly exhibits very high gold values (greater than 1,000 ppb) in a setting similar to that of high-sulphidation gold mines in Latin America, such as Pierina, Yanacocha, Pasqua-Lama and Fruta-del-Norte. The Torniella exploration permit, covering a surface area of 2,130 hectares, is located 110 kilometres north-west of Rome in an area which hosts significant mining activity.
At the time of this report the necessary due diligence and legal matters that need to be addressed by D'Aguilar, Ridge and Coltstar were well advanced, and the sale is expected to complete next quarter.
New Nickel and Cobalt - Queensland
AusNiCo is D'Aguilar's 80% owned nickel exploration subsidiary, focussed on defining nickel sulphide and oxide mineralisation in extensive new provinces in Queensland. In 2008, the company discovered the first significant nickel sulphide mineralisation in Qld at Pembroke near Kilkivan in Hole PEM 2 (4.2 metres @ 1.1% nickel within a 50 metres zone averaging 0.34% Ni near surface). A large zone of oxide nickel mineralisation is under assessment at Mt Cobalt in the same area. The prospect has been drilled by AusNiCo and a substantial oxide target in a hydrothermally altered serpentinite host has been outlined. D'Aguilar has identified potential for a deeper sulphide target coincident with a large magnetic anomaly.
On 16 June D'Aguilar was pleased to announce the securing of Mr John Downie as CEO designate. Mr Downie was previously the CEO of Gladstone Pacific Nickel Limited, which was dual-listed on the London and Toronto Stock Exchanges, following a USD40 million raising in 2007. During his time with Gladstone Pacific Nickel, Mr Downie was instrumental in obtaining a project funding proposal for USD2.85 billion, and overseeing the completion of the Final Feasibility Studies and EIS approval for the company's projects.
Mr Downie has extensive international corporate and project experience, having held the roles of Director of Mines, General Manager, Operations Manager, Managing Director, President and CEO for various resource companies including Barrack Mines, Alcoa (NYSE:AA), Boral (ASX:BLD) and Austpac Resources (ASX:APG) in a career spanning 30 years. The prospectus for the IPO and subsequent listing of AusNiCo on the Australian Stock Exchange was lodged with the Australian Investment and Securities Commission on 15 July, and the issue is expected to open on 2 August 2010. A priority allocation of shares has been reserved for D'Aguilar Gold Limited shareholders. Following the IPO raising of $4 million at 20 cents per share AusNiCo will have approximately 110 million shares on issue, with D'Aguilar holding an estimated 58,850,000 million shares (53.5%) which will have a market value based on the IPO issue price of $11.770 million on listing. Figure 7 shows the location of AusNiCo exploration tenements and main infrastructure throughout Central and South East Queensland.
Gold and Porphyry Copper-Gold-Solomon Islands and Queensland (LSE.AIM:SOLG)
D'Aguilar Gold holds 35.2 million shares representing 15.6% of Solomon Gold plc. These shares have a current market value (at 5.5 pence) of $AUD3.2 million at 23 July 2010. Details on Solomon Gold, its Board and projects can be viewed on the company website www.solomongold.com. The company trades on the Alternative Investment Market of the London Stock Exchange with the code SOLG.
Solomon Gold's main projects are in Queensland and the Solomon Islands (see Figure 8).
Solomon Gold has two key gold projects in Queensland - Rannes near Newcrest's Cracow gold mine and Mt Perry beside Lihir Gold's Mt Rawson gold mine. Having regard to the past exploration results an exploration target of between 1-2 million ounces at Mt Perry has been set, and between 2 to 6 million ounces on the Rannes Project area. Since acquiring the Rannes area (Central Minerals Pty Ltd) from D'Aguilar Gold in February this year Solomon has engaged 2 drilling rigs and recently announced a maiden resource of 200,000 ounces at the Crunchie prospect.
At Fauro Island in the north Solomon Islands, 80 kms south of the former giant Bougainville copper mine, recent mapping, sampling and geophysics has outlined targets for drilling over coming months.
Fauro is a volcanic epithermal crater with geology similar to the 40million ounce Lihir Island gold mine owned by Lihir Gold Limited (ASX:LGL) (NASDAQ:LIHR). An exploration target of 4 million ounces is believed to be realistic.
On Guadalcanal Newmont is earning a controlling position in joint venture on Solomon Gold tenements located over one of the most comprehensive and relatively unexplored porphyry terrains in the south west Pacific. The project is located on the south west Pacific "Rim of Fire" next to world class giant porphyry copper-gold mines at OK Tedi, Bougainville, Porgera and Grasberg which have endowments of 40-160 million ounces of gold. A target in excess of 20 million ounces has been set for the Guadalcanal Project.
In late June the company confirmed the successful completion of a capital raising via a non-renounceable rights issue and a placement to sophisticated investors amounting to $1.475 million. D'Aguilar also holds a $1 million converting note (10% coupon) and convertible at 8 pence in Solomon Gold plc, and will be repaid approximately $550,000 of recent exploration expenses from the pending IPO of AusNiCo Limited.
D'Aguilar's strategy of seeking listing of its key assets on recognised stock exchanges is designed to deliver negotiability for its key assets, less dilutive funding of forward exploration programs, and expanded and focussed project management teams independent of D'Aguilar.
D'Aguilar's aim is to hold its key positions in the assets it develops through ongoing holdings in the listed companies. Currently D'Aguilar holds 15.6% of AIM listed Solomon Gold plc and 48.2% of ASX listed Mt Isa Metals Limited. The company is about to launch the IPO and ASX listing of AusNiCo Limited and will hold 59%. The pending sale of Ridge Exploration will see D'Aguilar emerge with 23% of Coltstar Ventures Inc. Preparation of a prospectus for the ASX listing of Navaho Gold later this year has commenced. The company is also planning a listing event for Barlyne Mining and Anduramba Molybdenum within a vehicle focussed on porphyry copper-gold-molybdenum. Several other projects are in earlier stages of development, including an energy subsidiary and prospects at Bathurst (gold, copper) and Alexander Creek (diamonds). Figure 9 illustrates the D'Aguilar corporate structure as at 30 June 2010.
For the complete D'Aguilar quarterly report including figures and tables, please refer to the following link:
About DGR Global Limited
DGR Global (formerly D’Aguilar Gold Limited) (ASX:DGR) is focused on generating exploration and development companies in a wide array of minerals.
Projects are conceived directly through the skills and experience of D’Aguilar’s accomplished team of exploration geoscientists (with an enviable track record), not by the costly purchase of properties. Each project or exploration strategy is held in a separate subsidiary.
Focused and specialist management is then engaged in the subsidiary, with project specific finance raised in the subsidiary – faster and less dilutive to D’Aguilar. As the subsidiary project develops and starts to derisk the subsidiary is separately capitalised (seed raisings followed by an IPO).
Investors can choose to invest specifically in a particular project/commodity, or by investing in D’Aguilar, invest in the resource company generating business which retains a significant carried interest in each project.
D’Aguilar projects tend to be very large, targeting new provinces with the potential to make world-class discoveries. The exploration concepts are often novel. While increased metal prices and advances in technology can turn former sub-economic deposits into viable projects, D’Aguilar subsidiary projects frequently emerge from detailed reassessment and reinterpretation of large databases – looking at things from a new angle and with a different focus using state of the art techniques. The D’Aguilar Directors and Managers have in the past applied new exploration models to extensive tenement areas which have led to identification of new mineral provinces and the discovery of nationally significant resources. Similar efforts are now being dedicated to D’Aguilar.
Vital Metals Limited
Solomon Gold Plc
Mt Isa Metals Limited
Lihir Gold Limited
Gryphon Minerals Limited
Gladstone Pacific Nickel Limited
DGR Global Limited
Coltstar Ventures Inc.
Carbine Resources Limited
Blackthorn Resources Limited
Austpac Resources Nl
Ampella Mining Limited