Maputo — The Toronto based mining company Brigadier Gold on Monday announced that it is to buy a seventy per cent interest in a mining concession at Tsiquire in the district of Gorongosa, in the central Mozambican province of Sofala.
This follows the purchase of the Mozambique Gold Corporation (MGC) by Brigadier Gold in May. This was a private Vancouver-based corporation owned by an unnamed "arm's length investor", which held "proprietary due diligence information, research material and reports on several gold exploration projects in Mozambique".
Brigadier Gold announced in March that the only debts of MGC "are shareholder loans in the amount of approximately $325,000 incurred to purchase the diligence information. The purchase price for the shares and loans is the payment of $325,000 in cash and the issuance of special warrants entitling the vendors to acquire 7,500,000 treasury shares of Brigadier at a price of $0.05 per share"
Those "Special Warrants" have a 24 month term and can only be exercised if, after completion of the share purchase, Brigadier successfully negotiates the acquisition of an exploration right that is described in the diligence materials.
The exploration rights that Brigadier Gold is interested in are held by the Mozambican companies Aman Mining Lda (a subsidiary of the South African group Aman Holdings) and Jacoma Minerais Lda. On signing the final contract for the Tsiquire concession, Brigadier Gold will pay 1.2 million US dollars to and will pay a further 600,000 dollars a year later.
The company will also commit itself to spending at least a million dollars in each of the next two years on developing the mines.
The company will commission a "43-101 report" which is the Canadian format for releasing information to the stock exchange about the predicted mineral reserves at any mine.
This report will be the basis for making another payment to the current concession owners, based on the estimated quantity of gold.
The Tsiquire gold project covers 2,560 hectares near the town of Gorongosa.
There are already six pits started by artisanal miners and preliminary tests have indicated that gold can be mined at an average of 1 to 2 grams per tonne of rock.
According to Brigadier Gold, its target is to develop a "multi-million ounce, open-pittable, high tonnage gold deposit with bonanza-grade mineralization".
The company will now send a geological team to the area to carry out a detailed examination of the zone.
The Chinese company Sogecoa, a subsidiary of the Anhui Foreign Economic Construction Group, is prospecting for gold elsewhere in the district of Gorongosa.