Wednesday, 23 May 2012

EurOmax sets stage for transformation into London-based explorer

EurOmax Resources' (CVE:EOX)(OTCQX:EOXFF) share consolidation is the first step in a process that will transform the junior explorer into a London-based exploration and development company.

Currently listed in Toronto and the US, the company has three advanced gold and base metal properties in Bulgaria, Serbia, and Macedonia. These are mining-friendly regions, open to foreign investment, with a skilled and knowledgeable workforce.

"We're really looking at transforming into a London-based exploration and development company," EurOmax chief operating officer Mark Gustafson told Proactive Investors in a recent interview.

"Our assets are in Southeastern Europe, so they're closer to London than Toronto plus our three new proposed directors are all based in London. There will be a very strong London-based influence on the board and management team."

The eventual move to the London Stock Exchange may take place "well into next year."

EurOmax's shareholders recently approved a stock consolidation on a one for three basis, which would reduce outstanding shares to approximately 55 million common shares from around 166 million currently. They also voted to elect the following to the company’s board of directors: Mark Gustafson, Randal Matkaluk, Quinton Hennigh, Martyn Konig, Varshan Gokool and Steve Sharpe.

"We received really strong support," EurOmax's Gustafson said.

The company's key management team now inclused: Martyn Konig, non-executive chairman; Steve Sharpe, president & chief executive officer; Varshan Gokool, chief financial officer; Mark Gustafson, chief operating officer; Dimitar Dimitrov, senior vice-president of exploration; Quinton Hennigh, chief geologist and and Aurora Davidson, VP of finance & corporate secretary.

Gustafson says that the rationale behind the consolidation was to reduce the number of outstanding shares to a level "more appropriate" for a Europe-based company.

In a sign of his strong belief in the company, Gustafson has invested close to $1 million of his own money in EurOmax stock purchases over the past two years.

EurOmax has three core properties, one in each of the three countries where it operates.

The most advanced is the Illovitza copper-gold porphyry project in Macedonia - which "has the obvious development potential" to become a producing mine, Gustafson says.

In April, EurOmax unveiled an updated NI 43-101 resource update giving an indicated sulphide and mixed mineral resource of 22 million tonnes comprising 224,000 ounces of gold at an average grade of 0.31 grams per tonne (g/t) and 112 million pounds copper at an average grade of 0.23%.

On an inferred basis, the sulphide and mixed mineral resource was 374 million tonnes comprising 3.84 million ounces gold at an average grade of 0.32 g/t and 1.74 billion pounds copper at an average grade of 0.21%.

In Bulgaria, Trun is an intrusion-related gold project over 67 square kilometres. A January 2011 NI 43-101 report outlined an inferred resource of 2.1 million ounces of gold at the Logo prospect.

Earlier this month, EurOmax said recent drilling at Trun led to a high-grade silver discovery.

Drilling on the KD Zone at Little Hill, the southernmost of two granite intrusions on the property, returned 12.8 metres at 975 g/t silver, including 3.0 metres at 3,450 g/t silver in diamond drill hole 12132.

In Serbia, meanwhile, KMC is a large skarn/porphyry copper-gold project on a 42 square kilometres exploration license.

To date, drilling at KMC has identified extensive copper-gold skarn, gold skarn, and gold-bearing siliceous breccias in several locations. EurOmax believes one or multiple buried porphyry intrusions, perhaps also mineralized, may be the source for these widely occurring mineralized zones.

"Our Serbian property has the most upside potential from an exploration perspective," EurOmax's Gustafson says.

Following the recent sale of Thrace Resources in Bulgaria and the $3.8 million raised from a private placement in January, EurOmax has enough financial resources for this year's drilling campaign.

"Between the sale and January private placement, all of our exploration announced this year is funded. Any additional development at Illovitza would require financing but our 2012 program is fully funded."

Gustafson also says the company plans to add to its portfolio of assets in Bulgaria, Serbia and Macedonia.

"We will announce some additional prospects later in the year," he adds.

In terms of updates, final drill results from Trun are expected in early July, and over the summer and fall, EurOmax will proved further drilling updates on Ilovitza and KMC.

When asked on his outlook for gold and copper, EurOmax’s Gustafson is "not quite as bullish as others" and sees prices for gold and copper north of $1,500 and $3 a pound, respectively, but sees "pretty good" overall demand for the basic commodities.

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