Monday, 20 February 2012

Papillon Resources: West African gold exploration success attracts substantial shareholder

Papillon Resources (ASX: PIR) has welcomed Gryphon Minerals (ASX: GRY) as a substantial shareholder one day after reporting broad near-surface gold intersections at the company’s Fekola Project in West Africa.

Gryphon spent $13.75 million to purchase 15.98 million Papillon shares, which equates to a total interest of 6.72% in Papillon.

The move follows yesterday’s announcement of results from diamond drilling at the Fekola Project, which highlighted the project’s potential as a major gold resource.

Best intercepts from twin holes at the project include:

- 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.

Importantly, Papillon is well funded to begin Scoping Studies at Fekola, with a $16 million placement conducted earlier this month boosting the company’s cash position to about $27 million.

Papillon is advancing towards a maiden gold JORC Resource at Fekola around the middle of this year.

The Fekola project is located in the Mali West regional gold province, which hosts more than 22 million ounces of gold in 60 kilometres.

Other projects in the region include Randgold Resources' (LON: RRS) 11.5 million ounce Loulo project and AngloGold Ashanti's (NYSE: AU) 13.1 million ounce Sadiola project.

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