Auryx Gold nears TSX listing debut

[] — AURYX Gold, which has raised nearly C$50m, is just days away from its debut on the Toronto Stock Exchange and buying the Otjikoto gold prospect in Namibia from Teal Minerals for around C$30m.

A company called Tova Ventures is in a reverse takeover transaction with listed cash shell BC Ltd. The transaction should close by 25 June, which will be the trigger for Tova to change its name to Auryx Gold Corp.

Auryx, a play on the name oryx, a large antelope that roams the deserts of Namibia, is a gold-focused company interested in acquiring Teal’s Otjikoto prospect, which could deliver a mine capable of producing about 150,000 oz a year. ‘Au’ is the Periodic Table name for gold.

Auryx plans to conduct a pre-feasibility study into the prospect over the next 12 to 18 months before a year-long bankable feasibility study.

Teal’s last resource statement for Otjikoto was in June 2008. It put the indicated resource at a million ounces, with a grade of 1.4 grams/tonne. The inferred resource was just shy of 900,000 oz after being explored for around a decade.

Teal had its focus on Zambian copper rather than this relatively small gold prospect and it could be argued that as Auryx’s key project it will lavish it with money and attention.

Teal is owned by South Africa’s African Rainbow Minerals, which has made it clear the gold project is not deemed as core as it focuses on a copper project in Zambia. The Konkola North project, which could produce up to 45,000 tonnes of copper a year is a joint venture with Brazil’s Vale.

One of the factors to watch in the development of the Otjikoto prospect is what tie up, if any, there is with AngloGold Ashanti’s Navachab gold mine, which is two hours drive away on a paved road. It would make sense for there to be some kind of working together, given AngloGold’s history of joint ventures on projects in places like Mali.

Navachab strikes a lonely figure in AngloGold’s suite of assets, with annual gold output of around 65,000 oz, the second-lowest in the group ahead of the Savuka mine in South Africa. In the March quarter the mine produced 18,000 oz at a relatively high cost of $656/oz, which is above the group average of $619/oz.

Auryx plans to spend up to C$15m on the pre-feasibility work, of which about 80% will go on exploration work to bulk up the resources and the remainder on technical work like mining method and processes.

Auryx raised the nearly C$50m earlier this year and the money has been or will be paid into its account now that it has conditional approval for the reverse takeover and listing on the TSX, expected around 5/6 July.

Among Auyryx’s shareholders are the Bright Group and the BlueAlpha Investment. Namibian’s, in the form of a trade union investment arm, and business figures, own eight percent of the company.

There is no pressure on Auryx to list on the Namibian bourse, but it is an option down the line. There are around seven foreign junior miners listed on the exchange, which is active in seeking new entrants. A listing on the Johannesburg is a remote option.

An important milestone in the process is the filing of a filing statement by Tova Ventures on 18 June. The qualifying transaction has been completed.

The Auryx board will include Bongani Mtshisi, George Pirie, Tony Harwood, Alan Friedman, Tim Searcy, and Heye Daun. Searcy is expected to be appointed president, while Daun, who has mining experience, will be selected as president of Africa & Operations.