It is almost two years since UNX Energy Corp. was snapped up by HRT Participacoes em Petroleo S.A. of Brazil in a $730 million transaction that put UNX Chairman Duane Parnham and the company's offshore oil and gas assets in Namibia on investor radar screens.
Now, shareholders in another Parnham company, Giyani Gold Corp. (TSX: V.WDG, Stock Forum) are hoping that he can repeat that success as his company works to develop gold properties in Limpopo Province, northeastern South Africa.
On Thursday, Giyani Gold shares jumped 5% to $1.05 after the junior said it has secured South African government approvals to acquire additional prospecting licenses in a greenstone belt that contains six former mines with historical production of around 450,000 ounces of gold.
That leaves the company with a market cap of $57.4 million, based on 54.6 million shares outstanding. The 52-week range is $1.45 and 40 cents.
Parnham currently owns 10.2% of the company, which hopes to have its shares listed soon on both the Johannesburg and Namibian stock exchanges.
A Giyani Gold spokesman said the prospecting licenses are located in the vicinity of the former Klein Letaba mine, which has been the focus on the company’s recent exploration efforts in South Africa.
The company has budgeted $1.2 million for exploration this year under an agreement with state-owned Corridor Mining Resources, which is sharing exploration costs at Klein Letaba on an equal basis.
The hope is that sizeable gold deposits are waiting to be found close to the former mines, particularly in areas where a moratorium facilitated small scale mining operations at shallow depths.
This year’s drill program includes a series of step out holes in the vicinity of a new gold zone that was reported by the company in September 2012.
Drilling activity is expected to trace this new gold zone and marks the beginning of a drilling campaign designed to identify a gold resource in the area of the historic Klein Letaba mine.
The company is also working to identify a series of five historically mined gold veins down plunge from the original mine workings.
“These are the most exciting targets that we have discovered to date,’’ said Robert Middleton, Giyani’s vice-president, exploration. “Our 2012 drill program has confirmed that we have high grade gold veins on our Klein Letaba property and our 2013 drill program aims to better define these veins as we continue to work towards our goal of drilling a resource.’’
In order to allow Giyani to focus on South Africa, the company recently agreed to transfer its Canadian properties into capital pool company C Level III Inc. (TSX: V.CLV.P, Stock Forum). Those properties include the Abbie Lake-Keating gold project, near Wawa, Ont., the Skead gold property, near Larder Lake, Ont., and Baska Eldorado rare elements property in north-central Saskatchewan.
In return for those properties, C Level agreed to issue 24 million shares at 20 cents a share.
Once the transaction closes, Giyani Gold will own a majority stake in C Level, a company spokesman said.
The Abbie Lake-Keating gold project is the most significant of the Canadian assets and is located between Wesdome Gold Mine Ltd.’s (TSX: T.WDO, Stock Forum) Eagle River mine and Richmont Mines Inc.’s (TSX: T.RIC, Stock Forum) Island Gold mine.
The company says a potential gold-bearing structure called the Iron Lake Deformation Zone spans 27 kilometres through the Abbie Lake-Keating property. Last year, an exploration program comprised of geophysics and drilling targeted Iron Lake. New targets on the eastern extension of the deformation zone have been identified for further drilling.