Panthera Resources takes option to purchase 'promising' Labola Project

India and West Africa-focussed gold exploration and development company Panthera Resources has decided to move to a full option-to-purchase agreement following its successful due diligence investigation of the Labola Project in Burkina Faso, West Africa, it announced on Thursday.

The AIM-traded firm said it had informed the vendor of its decision to proceed, and made the initial option fee payment of $50,000.

It said the agreement allowed it up to five years to explore and develop the project, and it could obtain a 100% interest in the project by payment of $1m to the vendor at any time within that five-year period.

An additional payment of $1m would become due if a JORC-compliant resource exceeding one million ounces of contained gold was defined, with a 1% net smelter royalty capped at $2m payable from production.

The board said the Labola gold project consisted of a package of approximately 65 square kilometres of licences that hosted two significant quartz vein structures, which had been mined artisanally over at least a nine kilometre strike.

It said it was the first time the package of properties had been consolidated under one ownership, with it representing an “excellent opportunity” to integrate the significant amount of previous drilling and optimise the resource potential of the project.

Previous explorers had announced combined JORC and 43-101 compliant resources of more than 600,000 ounces, averaging approximately 1.2 grams per tonne of gold.

Panthera said it had undertaken an extensive review of those resources, and believed that with limited additional exploration work there was a “high probability” of being able to upgrade them again to JORC compliance.

It said there was “significant” potential for higher-grade mineralisation based on previous drill results, including two metres at 130.6 grams per tonne of gold from 66 metres, 11m at 8.2 grams per tonne of gold from 147 metres, and 6.5m at 7.26 grams per tonne of gold from 318 metres.

“This is an exciting addition to Panthera's West African gold portfolio with drill defined mineralisation identified over at least seven kilometres of the known nine kilometre strike, and previously identified resource estimates of approximately 600,000 ounces of contained gold,” said Panthera Resources managing director Geoff Stanley.

“The company is well advanced with planning programs to confirm previous resources and define extensions to those resources.

“The large strike extent of artisanal workings and the significant amount of previous drilling has provided abundant targets for initial exploration work and significantly de-risks the project.”