<P dir=ltr align=left><STRONG><FONT face="Trebuchet MS" color=#000000 size=4>Africa's next Wits Basin</FONT></STRONG></P>

11 March 2004 | 10:42 Code : 3659 Geoscience events
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<P dir=ltr align=left><FONT face=Arial color=#333333 size=2>Lawrie Minter, Emeritus Professor of Economic Geology at the University of Cape Town, believes there is a big area on the coast of Guyana in south America where the <FONT color=#ff6600>geology </

LONDON (Mineweb.com) – Lawrie Minter, Emeritus Professor of Economic Geology at the University of Cape Town, believes there is a big area on the coast of Guyana in south America where the geology is the same as South Africa’s Witwatersrand. Therefore it should have the potential to host not just gold deposits but gold provinces containing “multiple million ounce deposits.”

And he is in London to raise £5m to help confirm his theory.

Minter is director of exploration for GoldStone Resources, which expects to list on London’s Alternative Investment Market (AIM) before the end of March. At present GoldStone is wholly owned by a private South African company, GeoQuest Holdings, in which Remgro, the investment holding company established in 2000 after the restructuring of the former Rembrandt Group, has a 31% stake.

Other South African businessmen on the GoldStone board include Emil Burhrmann, an accountant and investment specialist who is also a director of Remgro, Trans Hex and Gencor. There is also Michael Christie, co-founder of the SPAR food chain in South Africa, as well as Jurie Wessels, a minerals lawyer who is GoldStone’s finance director.

GoldStone’s chief executive is Nico van der Hoven, 48, trained as a commercial lawyer but who has had 15 years experience at the sharp end of the mining sector, starting out by launching two chrome mining and exporting companies in South Africa. He co-founded GeoQuest in 1999.

Sir Michael Oliver, well known in London from his days at Kitcat and Aitken, Hill Samuel and Scottish Widows and today a director of a number of investment funds, is GoldStone’s non-executive chairman and the only UK resident on the board.

But it is Minter’s reputation that is holding the attention of prospective investors. He is an internationally recognised authority on the formation of ancient placer deposits. He has worked on the geology of the Witwatersrand mines for more than 20 years. In 1996 he was awarded the Society of Economic Geologists Silver Medal in recognition of his outstanding contribution to the knowledge and understanding of the Witwatersrand gold mineralisation.

And, although 66-year-old Minter spent nearly 20 years as professor of economic geology at Cape Town University, in his early days - from 1959 to 1983 - he held senior positions in the mining industry with companies such as General Mining and Anglo American. He consulted to Anglo on the Jacobina gold palaeoplacer mine in Brazil that produced about 670,000 ounces between 1983 and 1998.

Van der Hoven says GoldStone chose to come to London for its cash because Johannesburg investors have no taste for junior mining stocks listed on their domestic exchange. Toronto was an alternative but rejected partly because the different time zone would have made it very time consuming for the Johannesburg-based GoldStone directors to have regular face-to-face meetings with shareholders. And, just as important, most Canadian investors seem focused on North America and to know virtually nothing about the Witwatersrand – even though so far the area has produced about 50,000 tonnes of gold or roughly 40% of historic production.

The GoldStone story started back in 1998 when Minter was approached by a colleague and asked to explain the source of gold grains found in rocks in alluveum overlying the Roraima sedimentary basin in north west Guyana. Winter recognised the potential source of the gold to be pebble conglomerates of the Roraima and a potential Witwatersrand style of gold mineralisation.

That sparked a geological treasure hunt on which GoldStone so far has spent about US$3m.

Minter from 1998 to 2002 led a team of geologists that systematically mapped and evaluated the Proterozoic pebble conglomerates of the Roraima. The work included mapping, sampling and a five-hole drilling programme. One drill hole intersected quartz pebble conglomerate containing gold mineralisation – 3 grams per tonne over 45 centimetres, which Winter reckons is encouraging at this early stage in the exploration programme.

The host rocks of the Roraima are close to the surface and, if they prove to be gold bearing, would be amenable to open pit mining – something that would give them a big economic advantage over the deep Witwatersrand mines.

GoldStone now has licences covering 17,000 sq kms, valid until July 2005.

With the £5m it hopes to raise in London. GoldStone will carry out a diamond drilling programme of 86 shallow (250 metres) holes in areas Minter’s previous work has identified as key targets. If Minter’s theory about the area’s similarity with the Witwatersrand is correct, this drilling programme should identify any large palaeoplacers if they exist.

Van der Hoven says the cash will see GoldStone through another 18 months and the drilling programme should be completed in 8 months. The contractors have promised it can be done in six.

Present GoldStone shareholders will not be vending in any of their stakes in the company and nearly all of the new money will go towards putting holes in the ground. Van der Hoven says GoldStone has no debt and “we don’t have to buy any mineral rights from third parties.”

Apart from the search for gold, GoldStone has a second leg to its exploration work – the delineation of a major bauxite resource in Guyana.

This involvement stems from friendly meetings with Guyana’s Prime Minister, Samuel Hinds, who has just been re-elected for a second five-year term and is also Minister of Mines. He is a chemical engineer who previously worked in Guyana’s bauxite industry that currently produces more than 2m tonnes a year. He is keen to see foreign companies involved rebuilding the industry.

Preliminary work by GoldStone in one of its lease areas suggests there might be between 100m and 300m tonnes of bauxite at a suitable grade for making alumina – 37% bauxite, 4% silica. Minter says a bauxite reserve of 50m tonnes with these grades would be classified as large by international mining standards.

Two major mining groups are in preliminary discussions with GoldStone about the bauxite potential. Van de Hoven hopes a major will joint venture a bauxite project and take responsibility for a feasibility study.

He also hopes GoldStone will make a number of gold discoveries of a size to attract the majors. Joint venturing one gold project with a major in the early stages would provide cash flow to help GoldStone continue exploration and development work.

Guyana, formerly a British colony, uses English as its language and has a British-style legal system. There is a clear mining fiscal regime that gives the government 5% of revenue on gold and corporations pay 35% on taxable profits. There is also a 6.5% withholding tax on distributed dividends and no restriction on repatriation of profits or dividends.

At present Minter and van der Hoven don’t know what value London will put on GoldStone. That should be clear by the end of this week (March 12) when Westhouse Securities, acting as AIM nominated adviser and broker, has finished sounding out potential investors to see how much they are willing to pay for shares.

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