merah acquires option on · 4/4/2013 · dominated by birimian meta-volcanic and meta-sedimentary...

Merah Resources Limited ACN: 146 035 127

4 April 2013

DIRECTORS

Richard Homsany

Chairman

David Deloub

Managing Director

Ian Prentice

Non Executive Director

Suzie Foreman

Non Executive Director &

Company Secretary

SHARE INFORMATION

ASX Code: MEH

Issued Capital:

26.5M Fully Paid Shares

7.0M Unlisted Options

3.0M Performance Rights

CONTACT INFORMATION

Registered Office:

Level 2, 79 Hay St

Subiaco, WA

6008

T: +61 89200 4436

F: +61 89200 4437

www.merahresources.com.au

Highlights:

Merah Resources Limited (ASX:MEH) has entered into

separate agreements with Castle Minerals Limited

(ASX:CDT) to acquire 100% of Castle’s interests in the

Antubia and Kong gold projects situated in Western

Ghana.

The Antubia Gold Project consists of two contiguous

licences with a combined area of 295 km2 located

along strike from Newmont’s 17.7Moz Ahafo gold mine

on the faulted western margin of the Sefwi belt.

Three significant but underexplored gold anomalies

identified at Antubia, including the +3.5km long high

tenor Boizan target area.

Shallow drilling at Boizan has demonstrated the

presence of near surface gold mineralisation,

intersecting up to 18m at 2.74g/t.

The Kong Gold Project consists of 8 licence applications

covering over 1,200 km2 within the highly prospective

and under-explored NW region of Ghana.

The Kong Gold Project covers +50 km strike of

interpreted structural contact zones between Birimian

greenstones, Birimian sediments and later stage

granitoids.

MERAH ACQUIRES OPTION ON

GOLD PROJECTS IN GHANA

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Merah (ASX: MEH) is pleased to announce that is has entered into a heads of agreement

(Topago Agreement) with Topago (a wholly owned subsidiary of Castle) and Castle, to

acquire 100% of Topago’s interest in the Antubia gold tenements located in the Republic of

Ghana (Antubia Gold Project) and a heads of agreement (Castle Agreement) with Castle, to

acquire 100% of Castle’s interest in the Kong gold tenements located in the Republic of

Ghana (Kong Gold Project), held by Carlie Mining Limited (Carlie), a wholly owned subsidiary

of Castle.

OVERVIEW

Ghana is well endowed with gold resources and while it is the second largest African gold

producer after South Africa, it remains an under‐explored exploration jurisdiction. Ghana

contains multiple world‐class gold deposits, ranging in size from 2.0 to 20 Moz Au, and also

hosts the giant Obuasi deposit containing over 40 Moz Au.

Figure 1 – Location of concessions in Western Ghana. For

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ANTUBIA GOLD PROJECT

The Antubia Gold Project is owned by the ASX listed Castle (ASX: CDT) via its wholly owned

subsidiary Topago. The Ghanaian Government can require a 10% free-carried interest in the

Antubia Gold Project.

The Antubia Gold Project comprises two contiguous prospecting licences known as Antubia

and Boizan, located approximately 370km west-northwest of Accra, with a combined area

of 295 km2. The Project lies within the Juabeso-Bia District of the Western Region. Access to

the licences is by sealed roads via the major centres of Kumasi, Bibiani, Wiawso, and Sefwi

Asafo.

An excised Small Scale Mining Lease, located in the north east of the Project area, covers

the Antubia mine, one of the largest colonial gold mines in Ghana (having reportedly

produced 18,690oz between 1912 and 1939) and is the focus of ongoing artisanal mining.

Figure 2 –Antubia Gold Project relative to significant gold deposits in Western Ghana.

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Project Geology

The Antubia Gold Project area is located adjacent to the faulted western margin of the Sefwi

gold belt, ~90km southwest of the 17.7Moz Ahafo gold mine operated by Newmont. Kinross

Gold Corporation’s 2.4Moz Chirano Gold Mine and Noble Mineral Resources’ 2.8 Moz Bibiani

Gold Mine are located on the eastern margin of the Sefwi gold belt.

The Sefwi gold belt is a broadly north east trending sequence of Palaeoproterozoic Birimian

meta-volcanic and meta-sedimantary rocks and Dixcove suite granitoids. The project area is

dominated by Birimian meta-volcanic and meta-sedimentary rocks with Dixcove suite

granitoids to the west and north east. A fairly uniform regolith profile is observed at Antubia,

generally including a veneer of transported gravel or soil, overlying a residual sequence of

indurated laterite, mottled clays and saprolite. A significant north-northeast striking regional

fault occurs just to the west of the project area. Numerous subsidiary east-northeast striking

faults appear to have a strong control on the location of historical gold workings and the

identified gold soil anomalies.

Gold mineralisation associated with the Antubia mine within the excised Small Scale Mining

Lease and at other small historic workings within the project area is associated with quartz

veins containing finely disseminated gold and considerable accessory pyrite and

arsenopyrite within altered Birimian meta-sedimentary and meta-volcanic rocks.

The Antubia Gold Project currently contains three main target areas:

Boizan - situated in the north of the Boizan Licence and consists of a high tenor +3.5

km long by 0.5 – 1.0 km wide gold in soil anomaly defined by the +40 ppb Au in soil

contour (and including +1.0g/t Au in soil) which contains the Boizan and Sumiakrom

prospects;

Edukrom - situated in the south west of the project area and consists of a +1.5 km

long gold in soil anomaly adjacent to the north east trending contact between

Birimian meta-sedimantary rocks and Dixcove suite granitoids.

Antubia East – situated in the central east of the Antubia licence and contains the

Antubia, Juabesco and Afere prospects to the north east and south west of the

excised Antubia Small Scale Mining Lease. The Antubia and Juabesco prospects are

interpreted to be extensions of the Antubia mine trend currently being exploited by

artisanal miners.

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Figure 3 - Antubia Gold Project with local geology

Exploration History

Regional scale geochemical sampling has been completed over the majority of the Project

area, with infill follow up sampling defining the Boizan, Edukrom, Antubia and Juabesco

prospects. Topago completed two programs of RC drilling within the Boizan target area. This

drilling, which was generally on 100m spaced sections, tested parts of the Boizan and

Sumiakrom prospects to depths generally not exceeding 80 – 90m down hole and

intersected widespread gold mineralisation, including 18m at 2.74g/t from 24m in BZRC006

and 11m at 2.70g/t from 77m in BZRC025. See attachment for full listing of Antubia RC drilling.

Enhanced geological understanding gained from this drilling has confirmed a +3.5km long

zone associated with a ~100m wide black shale rich marker horizon, largely untested by

drilling, that represents a high priority target. Gold mineralisation appears to be best

developed on the footwall (west) side of this unit.

Exploration Plan

Initial exploration activity is expected to focus on the Boizan target area, with an airborne

geophysical survey proposed to assist in the definition of the black shale rich marker horizon

and structural complexities within this very large high tenor gold in soil anomaly. Data from

this survey will assist in planning RC drilling designed to both follow up gold mineralisation

defined from previous drilling as well as test new target zones within the broad geochemical

anomaly.

Additional geochemical sampling and geological mapping is expected to be undertaken

across the Edukrom and Antubia East target areas to define targets for initial RC drill testing.

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KONG GOLD PROJECT

The Kong Gold Project consists of 8 Prospecting Licence applications for which the registered

applicant is Carlie, a wholly owned subsidiary of Castle. The Ghanaian Government can

require a 10% free-carried interest in the Kong Gold Project.

The Kong Gold Project is located over an area of 1,200 km2 within the highly prospective and

under-explored NW of Ghana. Access to the tenements is by sealed roads via the townships

of Bole, Sawla and Tuna.

The Kong Gold Project covers +50 strike km of contact zones between Birimian greenstones,

Birimian sediments and later stage granitoids. These are interpreted to be structural and not

stratigraphic contacts and provide an optimal geological and structural setting for gold

prospectivity. The erosional level of the NW of Ghana results in extensive exposures of

intercalated fertile Birimian greenstones and Birimian sediments with limited post-

mineralisation cover.

Project Geology

The Kong Gold Project covers +50 km strike of the northwestern and central portion of the

Bole Bolgatanga greenstone belt before it significantly attenuates further to the northeast.

The Bole Bolgatanga greenstone sequence is controlled by the regional Bole Bolgatanga

fault that passes through the northern part of Ghana and then into Burkina Faso, where it

hosts the +1.0 MozAu Youga gold deposit. The southern portion of the Kong Gold Project

area is adjacent to the confluence of the Bole Bolgatanga greenstone belt and the Wa

Lawra greenstone belt, which extends northwards where it hosts the +1.0 Moz Kunche –

Bekpong gold deposit.

There are extensive contact zones, interpreted to be structural and not stratigraphic,

between the Birimian greenstones, Birimian sediments and later-stage granitoids within the

Kong Gold Project area, providing an optimal geological and structural setting.

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Figure 4 – Regional Geology of Kong Project

Exploration History

There has been limited previous exploration within the Kong Gold Project area, with regional

scale geological mapping and reconnaissance geochemistry followed by wide spaced

(minimum 1.0km line spacing) soil sampling completed by Castle in 2009. The majority of the

soil sampling was focused in the south east of the project area and identified some

anomalous trends at a +10 ppb gold in soil contour. The majority of the Project however

remains unexplored.

Exploration Plan

Initial exploration is expected to focus on detailed geological mapping and infill

geochemical sampling of the identified anomalous trends combined with systematic

geological mapping and selective geochemical sampling to identify areas of interest in the

broader project area. Defined areas of interest would then be subjected to more detailed

geochemical sampling to define anomalous gold target zones for subsequent drill testing. For

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Commercial Terms

The Company has entered into the Topago Agreement with Castle and Topago and the

Castle Agreement with Castle pursuant to which the Company has the option to acquire

100% of Topago’s interest and Castle’s interest (held by a wholly owned Castle subsidiary in

the case of the Kong Gold Project) in the tenements that comprise the Antubia Gold Project

and the Kong Gold Project.

Below is a summary of the key terms of the Topago Agreement:

Completion of the grant of the option (Antubia Option) to acquire 100% of Topago’s legal

and beneficial interest in the tenements that comprise the Antubia Gold Project (Antubia

Tenements) will take place within five (5) business days of the satisfaction or waiver of the last

of the conditions precedent at which time (amongst other things) Merah will make a cash

payment of AUD$85,000 and issue and allot 2,000,000 fully paid ordinary shares in the capital

of Merah, to Topago and/or its nominee(s), in respect of which Topago must deliver to Merah

a restriction agreement.

Merah will make a further cash payment of AUD$50,000 to Topago and/or its nominee(s) on

the date that is 12 months after the completion of the grant of the Antubia Option.

The Antubia Option may be exercised by Merah at any time or before the date that is twenty

four (24) months from the date on which the last of the conditions precedent for the grant of

the Antubia Option is satisfied or waived.

Minimum Expenditure

From the date of execution of the Topago Agreement until completion of the sale and

purchase of the Antubia Tenements under the Topago Agreement, Merah must expend a

minimum of $250,000 per annum on exploration and will be responsible for meeting the costs

of all outgoings with respect to the Antubia Tenements.

Sale and Purchase

Upon exercise of the Antubia Option by written notice from Merah to Topago or Castle,

Topago must sell and Merah must buy the Antubia Tenements, free from all encumbrances,

including the satisfaction or waiver of any conditions precedent for the sale and purchase of

the Antubia Tenements, and the parties may enter into a formal sale and purchase

agreement upon the request of a party.

The consideration payable by Merah to Topago will be as follows:

(a) the issue and allotment of 2,000,000 Shares to Topago and/or its nominee(s) upon

the first definition by Merah of a resource within the area of the Antubia Tenements

that is compliant with the JORC Code and which meets the investment

requirements of Merah in its sole and absolute discretion (Antubia Defined

Resource); and

(b) the issue and allotment of 2,000,000 Shares to Topago and/or its nominee(s) on the

last to occur of the following:

(i) completion of a first preliminary feasibility study commissioned or prepared

by Merah on the development of the proposed mining operation on the

Antubia Defined Resource on the basis of which a decision by Merah to

proceed with the development of a technically and commercially feasible

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and viable operation directed to the winning and mining of ore, and the

treatment of ore to produce saleable mineral product, can be made; and

(ii) the grant and issue of a mining licence by the relevant public authority in

respect of the Antubia Tenements containing the Antubia Defined Resource.

Below is a summary of the key terms of the Castle Agreement:

Completion of the grant of the option (Kong Option) to acquire 100% of Castle’s legal and

beneficial interest, right and title in and to the applications and/or tenements that comprise

the Kong Gold Project (held by Castle’s wholly owned subsidiary Carlie) (Kong Tenements)

will take place within five (5) business days of the satisfaction or waiver of the last of the

conditions precedent at which time (amongst other things) Merah will make a cash payment

of AUD$135,000, and issue and allot 2,000,000 Shares, to Castle and/or its nominee(s) in

respect of which Castle must deliver to Merah a restriction agreement.

The Kong Option may be exercised by Merah at any time or before the date that is twenty

four (24) months from the date on which the last of the conditions precedent for the grant of

the Kong Option is satisfied or waived.

Minimum Expenditure

From the Kong Option Grant Completion Date until completion of the sale and purchase of

the Kong Tenements under the Castle Agreement, Merah must expend a minimum of

$100,000 per annum on exploration and will be responsible for meeting the costs of all

outgoings with respect to the Kong Tenements.

Sale and Purchase

Upon exercise of the Kong Option by written notice from Merah to Castle, Castle must sell,

and must procure Carlie to sell, and Merah must buy the Kong Tenements, free from all

encumbrances, including the satisfaction or waiver of any conditions precedent for the sale

and purchase of the Kong Tenements, and the parties may enter into a formal sale and

purchase agreement upon the request of a party.

The consideration payable by Merah to Castle in connection with the sale and purchase of

the Kong Tenements under the Castle Agreement will be as follows:

(a) the issue and allotment of 2,000,000 Shares to Castle and/or its nominee(s) upon

the first definition by Merah of a resource within the area of the Kong

Tenements that is compliant with the JORC Code and which meets the

investment requirements of Merah in its sole and absolute discretion (Kong

Defined Resource); and

(b) the issue and allotment of 2,000,000 Shares to Castle and/or its nominee(s) on

the last to occur of the following:

(i) completion of a first preliminary feasibility study commissioned or

prepared by Merah on the development of the proposed mining

operation on the Kong Defined Resource on the basis of which a

decision by Merah to proceed with the development of a technically

and commercially feasible and viable operation directed to the winning

and mining of ore, and the treatment of ore to produce saleable

mineral product, can be made; and

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(j) the grant and issue of a mining licence by the relevant public authority

in respect of the Kong Tenements containing the Kong Defined

Resource.

Conditions Precedent

The grant of the Antubia Option and the Kong Option, completion of the sale and purchase

of the Antubia Tenements and the Kong Tenements under the Topago and Castle

Agreements and all other transactions contemplated under the Topago and Castle

Agreements are conditional on the satisfaction of the following conditions precedent:

(a) if necessary, Merah’s shareholders approving the entry by Merah into the Topago

and Castle Agreements and/or the transactions under the Topago and Castle

Agreements (including the issue of Shares) pursuant to the ASX Listing Rules and/or

the Corporations Act 2001 (Cth), on terms acceptable to Merah, such approval to

be obtained within 90 days from the date of execution of the relevant agreement;

(b) any consents, approvals, authorisations or clearances of the transactions under the

Topago and Castle Agreements which are required, or Merah considers are

necessary or desirable for the implementation of the Topago Agreement or the

Castle Agreement, are obtained from any government department, minister,

agency or other public authority whether in the Commonwealth of Australia or the

Republic of Ghana or are obtained under any applicable laws, regulations or orders

including the ASX Listing Rules, and the laws of the Commonwealth of Australia and

the Republic of Ghana, on terms acceptable to Merah within 6 months from the

date of execution of the relevant agreement; and

(c) in the case of the Castle Agreement, the grant of the Kong Tenements pursuant to

each of the applications for those tenements on terms acceptable to Merah, and

Castle’s wholly owned subsidiary Carlie becoming the sole registered legal and

beneficial owner of the Kong Tenements within 6 months from the date of execution

of the relevant agreement.

Yours faithfully,

David Deloub

Managing Director

Exploration or technical information in this release has been prepared by Mr Ian Prentice BSc,

who is a non-executive director of Merah Resources Ltd, a director of Zephyr Consulting

Group Pty Ltd and a Member of the Australian Institute of Mining and Metallurgy. Mr Prentice

has sufficient experience which is relevant to the style of mineralisation under consideration

and to the activity which he is undertaking to qualify as a Competent Person as defined in

the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral

Resources and Ore Reserves” (the JORC Code). Mr Prentice consents to the report being

issued in the form and context in which it appears.

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About Merah Resources Limited

Merah was incorporated on 27 August 2010 for the purpose of identifying, evaluating and

acquiring resource projects and assets in Australia and/or overseas that are considered by

the Board to add potential shareholder value.

The Company plans to continue to explore the Lawlers project areas that make up its current

asset portfolio.

The Company also intends to continue to identify, evaluate and if warranted, acquire

additional resource projects and assets both in Australia and overseas.

These projects may be acquired by way of direct project acquisition, joint venture, farm-in or

equity investment.

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Antubia Project Significant Reverse Circulation Drill Results

Hole ID UTM

North UTM East

Depth

(m) Dip

Azimuth

UTM Intersection

BZRC001 706,103 512,303 80 -50 270 1m @ 0.83g/t gold from 15m

1m @ 0.74g/t gold from 50m


BZRC002 706,103 512,355 80 -50 270 3m @ 0.89 g/t gold from 16m











including 1m @ 30.72 g/t gold

from 25m















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BZRC016 703,295 512,003 88 -50 270 2m @ 0.95 g/t gold from 20m

2m @ 1.40 g/t gold from 27m



BZRC019 703,292 512,155 80 -50 270 No significant intercept



























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Notes :

Final assay results from reverse circulation drilling 1m riffle splits.

3m maximum internal dilution, 0.5 g/t Au lower cut, no upper cut - Boizan Intercepts

3m maximum internal dilution, 0.2 g/t Au lower cut, no upper cut - Sumiakrom Intercepts

Gold analyses performed using BLEG Leachwell Method/AAS finish (Fire Assay of Tail) by SGS

Laboratories, Tarkwa, Ghana. Reference standards, duplicate and blank samples were routinely

submitted and were within acceptable limits.

All drill holes picked up by GPS with accuracy of +-5m.

All drill holes were down hole surveyed for dip and azimuth at approximately 40m intervals down hole.

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merah acquires option on · 4/4/2013 · dominated by birimian meta-volcanic and meta-sedimentary...

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