(MENAFN - ProactiveInvestors - Australia) Merah Resources (ASX: MEH) has entered into an agreement to wholly acquire Ugandan company Goldspy Africa Limited.
Goldspy holds one granted exploration licence and two prospecting licences, currently the subject of applications for two additional exploration licences, in Uganda, East Africa that cover 335 square kilometres and are prospective for gold and base metals.
The concessions are located in the south eastern province of Uganda, about 150 kilometres east of the capital, Kampala, and are intersected by the Kampala to Mumbasa highway linking the country to the commercial port in the Kenyan city of Mumbasa.
They are collectively known as the Iganga Project and are located within a large underexplored potential gold and base metals province in the southeast of Uganda and close to the Busia goldfields of Kenya.
High gold potential
A significant portion of the project is composed of late Archaean rocks of the Busia-Kakamega greenstone belt of the larger Lake Victoria greenstone terrain.
The metavolcanics of the Nyanzian Supergroup in southeastern Uganda have attracted interest for mineral exploration due to their high gold potential as demonstrated by the discovery of world class gold deposits in similar rocks in the Mwanza area in Tanzania.
In Uganda, the Iganga project's gold potential remains to be confirmed, pending systematic exploration.
Limited exploration was undertaken on the southern concession by Vangold Resources, including a soil sampling survey in 2008 in a small area to the northeast of the concession.
This survey, which covered an area of about 4 square kilometres on wide spaced north to south traverses, identified anomalous gold values which appear to correlate with an interpreted north west trending granite-greenstone contact.
There is evidence of artisanal gold mining taking place to the east of the southern concession.
In the early 1980s, Geosurvey Gmbh carried out regional airborne geophysical surveys that covered virtually the whole of East, Central and Southern Africa.
Interpretation of data that covered the eastern and south-eastern regions of Uganda revealed several magnetic anomalies, two of which occur either wholly or partly within the northern concessions, as seen from the airborne geophysical data.
Limited geochemical sampling of the gabbro bodies has indicated potential for base and precious metal mineralisation.
Previous work carried out on the concessions will be verified as part of Merah's technical due diligence.
Merah will satisfy the acquisition through a combination of cash payments and the issue of shares.
The company will pay a refundable deposit of A55,000 and issue 1.8 million shares on completion, which were last trading at around 0.27 valuing the initial share issue at around 486,000.
Further payments will be made and shares issued once certain milestones have been met, including the granting of exploration licences on any of the applications and the definition of a maiden JORC resource.
Merah has engaged a field team to undertake technical due diligence on the assets.