Four of the men who helped create gold junior
The African Gold team comprises Michael Nikiforuk as corporate development officer and director, and Simon Lawrence, Greg Hawkins and Marco Durante as directors.
In 1995-96, from their home base of Toronto, Nikiforuk and partner Arnold Kondrat (Banro’s current interim president and CEO) teamed up with Hawkins, an Accra-based geologist who owns the exploration contracting company CME & Co. in Ghana. Hawkins recommended that Banro acquire Sominki, the largest private-sector mining company in what is now the western portion of the Democratic Republic of Congo, in partnership with U.K.-based Cluff Resources, a company that was subsequently bought by Ashanti Goldfields.
Hawkins became Banro’s consulting geologist and project manager and introduced the company to Simon Lawrence, then stationed in London, England, as a mining-equities broker with ABN-Amro. (Today, Lawrence is best known as vice-president of corporate development for
“The four of us were instrumental in raising $39 million for Banro over three rounds,” Nikiforuk told attendees at a recent African Gold Group function in Toronto. He described how that capital was deployed in the largest airlift of an exploration camp in African mining history, with Banro moving 100 tonnes of equipment and supplies into the remote Great Lakes region of eastern Zaire.
“That experience brought the four of us together in business,” said Nikiforuk. “Our business relationships extended into personal friendships that found us collectively discussing re-uniting and launching our own company in a more friendly and peaceful part of the African continent — Ghana, Greg Hawkins’ back yard.”
Added Lawrence: “My roots run deep in Ghana: I was born in the Ashanti gold region, somewhere around Obuasi, and spent many days as a young boy searching for gold. Although my tools were simple — just a small hammer — I found rich gold specimens running many ounces per tonne. And here, 30 years later, I’m keen to continue the search.”
In June 2002, Hawkins began accumulating a land package in Ghana for the African Gold Group, while the other three completed the capital structure of the company, resulting in its incorporation in October 2002.
The partners raised $780,000 in seed capital; then Sprott Securities entered the scene to put together a $1.2-million financing that closed last December.
Sprott also acted as sponsor for the reverse-takeover of TSX- Venture shell company
The Sprott financing resulted in the issuance of 2 million special warrants priced at 60 apiece. Each special warrant is convertible, once the reverse-takeover closes, into an African Gold Group share plus half a warrant exercisable at $1.
When the RTO closes, African Gold Group will have 15.4 million shares issued and outstanding, 1 million warrants, $1.2 million in cash, and no debt.
The remaining officers are President Kevin Van Niekerk and Chief Financial Officer Stephen Dulmage. The board of directors comprises Nikiforuk, Hawkins, Lawrence, Durante, lawyer David Brown, and mining consultant Henry Reimer.
Insiders will hold 55% of the outstanding shares; Koda shareholders, about 10%.
Officers and directors will own the following interests: Nikiforuk, 16.4%; Hawkins, 13.9%; Lawrence, 13.9%; Durante, 0.7%; Dulmage, 0.7%; Van Niekerk, nil; and Brown, nil.
The insiders’ shares are held in escrow, with 10% due to be released on completion of the transaction, and 15% to be released every six months thereafter.
As well, officers will bring home the following in annual compensation: Van Niekerk, C$84,000; Nikiforuk, C$60,000; and Dulmage, C$36,000.
Mankranho
African Gold Group’s primary asset its 108 sq.-km Mankranho concession, staked four years ago by U.S.-based
Mankranho represents an 8-km portion of the northernmost extension of the Yamfo-Sefwi gold belt, which has been mostly locked up by
Newmont’s Ahafo mine is scheduled to come onstream in late 2006 at a production rate of 500,000 oz. per year and a total cash cost of US$185 per oz.
“Newmont is not just coming to Ghana for 7.6 million oz.; there will be many times more ounces announced over the history of Ahafo,” said Hawkins. “They’re coming for something much bigger, so for us to have a piece of that, it’s quite astounding, and it is the basis for our valuation.”
Columbia River carried out a reconnaissance program at Mankranho in 1999 and 2000, using Hawkins’ CME as program manager. The work included ground-magnetic and induced-polarization surveys, soil and silt sampling, the digging of 14 trenches that produced low gold values, and the drilling of 15 reverse-circulation holes totalling 1,500 metres.
The drilling encountered mainly a sedimentary section of greywackes and phyllites, with occasional thin interbeds of volcaniclastic tuffs and basalt.
There is no evidence of local artisanal mining activity or modern exploration in the Mankranho licence area, perhaps because there are no exposed quartz veins hosting coarse gold.
The African Gold Group will explore Mankranho this year, in particular the portions known as Areas I and II.
African Gold Group has hired Hawkins’ contracting company, CME, as its project manager in Ghana. CME is already a contractor to
Asankrangwa belt
African Gold Group’s remaining assets, the Twedee and Moseaso licences, are about 70 km southeast of Mankranho on a 9-km segment of the northern tip of the Asankrangwa gold belt.
At Twedee, African Gold Group has an option to acquire, for US$25,000, privately held Arziki Mining, which holds the 295-sq.-km concession. Work at Twedee in the late 1990s included an airborne survey and reconnaissance work.
Also, the group has a 5-year option agreement with Ghana-based Moseaso Mining to acquire the 9.3-sq.-km Moseaso licence, subject to a 15% net profits interest if there is any production. To fulfill the option, African Gold Group must pay US$25,000 each January for five years. The first payment has already been made.
(If production is achieved on any properties in Ghana, the national government automatically assumes a 10% carried interest.)
“This is just the beginning of what we want to do,” said Nikiforuk. “There are a lot more acquisitions we’re chasing, which could add to the mix.”
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