West Wits to acquire Papua gold project
Friday, February 4 2011 - 01:40 AM WIB
The company said in a statement that it believes can be brought into production with modern mining techniques in the near term. This acquisition will provide early stage entry into a promising gold project based on evidence from existing artisanal operations and also has hard rock exploration potential to locate the source of the alluvial gold.
The project is situated on the Derewo River within the central mountains of the Papua province. The project is located approximately 110km north west of Freeport?s Grasberg complex. Paniai currently owns a 50% interest in the alluvial gold project and 50% of the wider exploration registered applications which provides the opportunity for hard rock exploration potential. The 50% interest in the wider exploration registered applications can be increased to an 80% interest afterA$2 million has been spent on exploration.
The mining area was discovered in 2004 with local artisanal miners mining isolated alluvial gold pockets in the downstream of. the Derewo River close to Nabire. This led to the discovery of high concentrations of alluvial gold in the Derewo River where it exits the central mountains of Papua. This area has shown potential with reports of several tonnes of gold having been extracted over the last few years.
Currently there are local miners working the alluvial and colluvial gold bearing gravels on the Derewo River. The gold is occurring in the form of coarse nuggets which show clear signs of fluvial transport. These nuggets are found in Derewo River terrace deposits.
Paniai via its 50% interest has been granted a 40-ha mining lease covering one of the main mining areas which was granted by the local Paniai regency government as well as a further 491 ha of mining leases pending from the provincial government. An Environmental Impact Statement has been submitted and is currently in and advanced executed a Landowners Agreement with the local indigenous Wolami People which was one of the first of its kind in Papua Province.
The company has entered into this agreement based on materials provided by Paniai, which will now be confirmed through a due diligence program. This program is to be completed by the 31st March 2011, at which time (upon satisfactory results) the deal will proceed with the regulatory and shareholder approval process.
The company has also entered into a mandate letter with BGF Equities Pty Ltd to place with their institutional and high net worth clients in Australia, Asia and the UK, on a best endeavours basis. This placement, the new share component of which is subject to shareholder approval, will generate approximately $3 million to be used at the Derewo River gold project to establish a modern alluvial operation as well as allowing the company to complete its drill program at the company?s existing Monarch Resource and ?gap? area both located along strike and directly south of the Emerald Gold Project. (denny)