Gryphon Minerals (ASX: GRY) has picked up a 6.72% equity stake in West African-focused gold explorer Papillon Resources (ASX: PIR), complementing its other strategic stakes including 13% in Tawana Resources (ASX: TAW) and 16% in Renaissance Minerals (ASX: RNS).
The company acquired nearly 16 million shares in Papillon for a total consideration of A$13.7 million between 23 May 2011 and 20 February 2012, providing an average entry price of $0.86.
The strategic investment provides Gryphon exposure to Papillon’s promising gold projects located in Mali, West Africa.
Papillon continues to unlock the massive potential of its Fekola gold project where it is aiming to deliver a maiden gold JORC Resource by mid-2012.
Recent drilling has delivered highlight intersections of 75 metres at 4.12 grams per tonne (g/t) gold from 104 metres, and 32 metres at 7.35g/t gold from 59 metres.
Highlighting the strategic location of the project, it is situated in the Mali West regional gold province, which has more than 22 million ounces of gold within 60 kilometres.
Other projects in the vicinity include Randgold Resources’ (LON: RRS) 11.5 million ounce Loulo project and AngloGold Ashanti's (NYSE: AU) 13.1 million ounce Sadiola project.
Gryphon managing director Steve Parsons said Gryphon’s stated strategy has always been to increase its exposure to quality gold assets in West Africa.
“While Papillon’s gold projects are still at a relatively early stage, we are attracted to their exploration potential,” he said.
Portfolio of highly prospective assets
“The equity stake in Papillon forms part of the portfolio of assets within Gryphon,” Parsons said.
Gryphon owns the Banfora Gold Project in Burkina Faso which has an Inferred JORC Resource of 29 million tonnes at 2.1g/t for 2 million ounces of gold.
The company is undertaking an aggressive $30 million exploration program and advancing Definitive Feasibility Studies.
Gryphon is assessing the potential for a 3.5 million tonne per annum open pit mining operation to produce in excess of 200,000 ounces of gold per annum.
The company is also continuing regional exploration on its other West African projects, including the Tijirit Gold Project adjacent to the Tasiast Gold Mine in Mauritania, and in Cote d’Ivoire and Liberia.
Parsons said while Gryphon remains fully focused on rapidly advancing the Banfora Gold Project and its West Africa footprint, the company’s strong financial position gives Gryphon the ability to move quickly on opportunities which offer growth, without impacting existing activities.
At the end of the December quarter, Gryphon had around $83 million in cash reserves.
Indicating the strong investor backing Gryphon continues to receive, the company netted $58.5 million via a share placement in late November.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/25530/gryphon-minerals-increases-exposure-to-highly-prospective-gold-assets-in-west-africa--25530.html