Segilola Gold Project
Joint Venture Partner
CGA Mining Limited (“CGA”) has entered into a Heads of Agreement with Tropical Mines Limited (“TML”), a private company based in Nigeria, to acquire a 51% interest in the Segilola Gold Project in Nigeria, considered to be the most advanced gold exploration project in the country. TML is a Nigerian company owned 80% by local investors and 20% by the Government.
Finalisation of the formal joint venture agreement is waiting on final approval of the transfer of the licence to the new joint venture.
Location
The Segilola Gold Project is located at the village of Iperindo-Odo Ijesha, near the city of Ilesha in Osun State, Nigeria. The project site is situated within 600m of a sealed road, 18km south of the regional centre Ilesha, the local government centre, with a population of 300,000, which is itself located on a sealed dual carriage way, 120km north east of Lagos (the principal international entry port and major commercial centre of Nigeria, estimated population, 16 million).
Nigeria has a well established petro-chemical industry based in the Niger River delta and the government of Nigeria, is now in its second term of democratic rule. The Government has recently established the Ministry for Solid Minerals Development to administer all mineral assets occurring in Nigeria other than oil and natural gas.
Drawing Number 5 South Western Nigeria including Segilola Project Site
Licences
The project is the subject of Mining Lease (ML 19706) that covers an area of 46 hectares within an Exploration Licence (EPL 13205) covering 16km2. The current title holder, TML has recently been granted an extended Exploration Licence area of 400km2 surrounding the project area. All such licences would be transferred to the joint venture with CGA on satisfaction of the conditions precedent as set out below.
Joint Venture Terms
The Heads of Agreement is conditional on securing any required ministry and Government approvals. The key terms of the joint venture are as set out below.
- Payment to TML of a signing fee of US$150,000 on satisfaction of the due diligence period.
- Completion of a definitive drill program and subsequent bankable feasibility study within a twenty four (24) month period.
- A deferred payment of US$500,000 if and when the project is deemed to be economic, project financing is secured, development construction commenced and drawdown of debt funding is available.
- Should the project be developed, repayment of TML past onsite expenditure, subordinate to project financing and joint venture partner loan accounts.
- CGA will be the manager and operator of the joint venture.
Geology
Drawing Number 6 Simplified Geology
The geological setting is described as typically Archaen greenstone. The known mineralised zone extends over an identified strike length of approximately 1000m. The gold mineralisation is in the form of quartzite veins. The veins are invariably steep dipping and are commonly associated with fractures and shear zones. What is commonly called the Iperendo reef is not one vein but comprises a vein system of several parallel-silicified zones within the Ile-Ife-Ilesha schist belt.
The gold mineralisation is known to be closely linked to silification and phyllic alteration, and to occur together with pyrite and molybdenite. The gold mineralisation is bound to the vein sections and to the altered wall rocks thus forming a drillcore indicated ore body with a thickness between 5m and 28m (average approximately 10m). The gold contents change along strike as well in dip, grades encountered in the cores vary between <1g/t and 136g/t.
Drawing Number 7 Regional Geology – South Western Nigeria
The concentration of the gold in quartz veins and silicified zones along major faults and fracture zones is attributed to the Pan Africa thermotectonic event. The major fractures and shear zones, most with an overall NNE-SSW tend to appear to be a feature of the region. The regional setting is very similar to the Ashanti and Sefwi systems in nearby Ghana, which have hosted gold production in excess of 20 million ounces.
Drawing Number 8 Southern Ghana Indicating the two gold bearing “belts” similar to that existing in South Western Nigeria
Previously completed works by Hansa Geomin, a German resource engineering company, at the site include the following:
- Landsat TM imagery and aerial photography;
- Geological mapping @ 1:12500;
- 1500 soil samples analysed for gold;
- 520m of costeaning;
- 100m of exploration adit;
- 400km ground magnetics;
- 10km radiometrics; and
- 2800m of diamond drilling. Holes were spaced 30m apart logged and sampled/analysed in 1m intervals.
Resource Potential
An assessment by a leading Australian geological firm in October 1995 included an assessment of the potential ore reserves at the project which suggested a potential resource in excess of 800,000 ounces.
A drill indicated gold mineralisation zone has been shown to exist for 950m along strike and to 150m in depth. The drilling to date suggests a grade in excess of 5g/t will be available in any future operations.
The Company has not yet commissioned a technical report on the Segilola Project, and as such is not in a position to adopt the resource and other technical information prepared by TML or its consultants, but intends to prepare a 43-101 compliant technical report once a resource estimate is prepared by the Company.
CGA has reviewed the TML database (hard copy) and the Hansa Geomin database (digital), determined a common grid and produced plans and sections detailing all previous drilling and excavations.
It is apparent that both the up and down dip extensions and those beyond the 950m strike length have not been tested so the prospectivity for those areas within the JV tenements is considered strong.
