(MENAFN - ProactiveInvestors - Australia) Volta Mining (ASX: VTM) is delivering on the company strategy of increasing exposure to West Africa, and has moved to acquire the Kango Iron Ore Project in Gabon.
The project covers over 1800 square kilometres and is strategically located to infrastructure being 15 kilometres from the bulk haulage Trans-Gabon Railway, which runs 125 kilometres to the Owendo Port, Libreville.
Volta has entered into a binding Heads of Agreement with Core Mining Limited, with Volta to use a subsidiary to wholly acquire Core - the holder of the project.
Consideration for the deal will be nine million Volta shares and a down payment of US200,000.
To give the consideration some context, Volta last traded at 0.215, valuing the scrip component of the deal at around A1.94 million.
Legal and technical due diligence is underway by Volta and is to be completed within a specified 30 day period.
Up to 61% iron
Early exploration at Kango included analysis of available aeromagnetic survey data showed significant elevated magnetic responses of over 30 kilometres on a 60 kilometre anomaly.
Geological mapping and outcrop sampling performed by Core has identified itabirite or hematite-enriched itabirite with samples typically ranging from 39% iron to 50% iron, and up to 61.7% iron.
Additional African exposure
Volta also has two granted exploration licenses known as the Mbombo Iron Ore Project, which covers an extensive area of almost 4000 square kilometres in Gabon.
Today's deal will deliver synergies within the country.
Volta also has gold exposure in Burkina Faso, with a planned reverse circulation and infill auger drilling program to recommence at the Koro and ibi Palga Gold Projects before the end of 2012, once the rainy season is over.