Kenyan Gold Mine JV

Goldplat plc, the AIM listed gold producer, has formed a joint venture to develop the gold potential of the highly prospective 213 sq km Lolgorien licence area located in the historically producing Migori Archaean Greenstone Belt in western Kenya, with a view of establishing a mining operation in the short term. The agreement marks the next stage in the Company's strategy to create a mid-tier mining house focused on gold production, leveraged through revenue generated from its gold and PGM mining by-product processing operations in South Africa and Ghana.

Under the joint venture agreement with International Gold Exploration AB ('IGE'), a Swedish mineral exploration company quoted on the Oslo Stock Exchange, a new company will be formed in Kenya ('Newco') into which IGE will provide the mineral rights and transfer all existing plant, equipment and buildings on the Lolgorien licence area. Goldplat will provide Newco with cash and/or services and equipment to the value of US$400,000. Thereafter, each party will contribute equally to the costs of gold exploration and production and share equally in profits generated.

The Migori Archaean Greenstone Belt, where the Lolgorien licence area is located, is in the northern continuation of the Lake Victoria Goldfields, which hosts many major gold deposits. This includes Barrick's multi-million ounce North Mara mine, which lies approximately 40 km to the southwest of the Lolgorien property. The neighbouring Macalder Mine, which produced 950 kg of gold between 1935 and 1966 and now has a resource of 1.24 million ounces ('ozs') gold, is currently being explored by a Canadian junior. The belt is exposed for 90 km along a northwest strike and is approximately 11 kms wide. The structure of the Migori belt is considered to be a broad syncline with Lolgorien situated on the southern, more highly strained limb.

The licence area has been the site of considerable historical gold mining and is still the focus of artisanal mining. Official reports, starting from the early 1900s, show that between 1920 and 1950 the area produced nearly 1 million ounces of gold.

Substantial exploration and mining has historically been undertaken on the Lolgorien licence area and up to ten targets have already been identified by Goldplat's geological team. Kilimapesa Hill is currently the highest priority target, which is part of a 10 km long ridge of banded iron formation (BIF) on which there is a 1,400 m section of artisanal gold mining workings. The BIF typically varies in width between 10-20 m although some areas reach 30 m, and the entire zone of mineralisation is up to 60 m wide. There is a marked similarity between the Kilimapesa style of mineralisation and that of the 2.2 million oz gold sulphide replacement BIF mineralisation at Golden Ridge, and the mineralisation of Geita in Lake Victoria Goldfields. Five adits developed during the early 1900s have been recently re-sampled and confirm that high grade values were mainly situated within the BIFs, although there were also some high values recorded in quartz veinlets in the adjacent lithologies. A drift followed the quartz vein for 70 m and rock chip samples frequently returned values between 10-20 g/t Au.

In 1999 IGE sunk a shaft and undertook development in the southern portion of the licence area, focusing on quartz vein swarms which recorded rock-chip sample grading between 1 g/t Au and 140 g/t Au. There is also considerable geochemical and drill data available from previous exploration programmes in the 1980s and 1990s, which requires re-interpretation. A small processing plant is on the property comprising a ball mill, gravity circuit and CIL leach tanks. Many other small mines also exist on the property, which are either abandoned or are being worked by artisanal miners.

Goldplat's initial focus is to proceed to resource definition by taking the following steps:

1. Collate all available geological and technical data and identify the most promising targets, which will be prioritised and further evaluated by;

  • Accessing old workings and sampling the target areas;
  • Trenching on surface;
  • Sampling of outcrop areas and other reef exposures; and
  • Primary development in accessible areas to access larger areas of the ore body.

2. Define available mineral resources based on the above exploration followed by feasibility studies.

Demetri Manolis, CEO of Goldplat said, 'This is an exciting first step towards achieving Goldplat's strategy of becoming a leading mid-tier mining house through acquisition. The Lolgorien licence area has significant historic production and is in a region that houses some of Kenya's largest goldmines. Kenya is an attractive country for us to operate in with an active Chamber of Mines and a new Mining Act imminent, which is expected to reflect the liberal philosophy of other countries such as neighbouring Tanzania. Using existing cash resources we intend to initiate an extensive confirmatory exploration programme to define a gold resource. We have the team and experience to make rapid progress at Lolgorien and I believe that in a fairly short timeframe, we can establish a gold mining operation in accordance with our strategy.'

For further information contact:

Demetri Manolis
Tel: +27 11 423 1202
Fax: + 27 11 423 1230
Mobile : + 27 82 454 7392

Isabel Crossley
St Brides Media & Finance Ltd
Tel+44 (0)20 7242 4477