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White Rivers in JV talks with major South African gold producers


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White Rivers in JV talks with major South African gold producers

White Rivers Exploration Pty. Ltd. is considering another gold partnership in South Africa.

"We are talking to a number of other large South African producers," Executive Chairman Neil Warburton told SNL Metals & Mining.

"Because our tenement package, or our projects associated with those packages, are abutting existing infrastructure or very close to under-utilized existing infrastructure, other majors are very interested."

White Rivers has a joint venture with Harmony Gold Mining Co. Ltd. near Harmony's Target mine.

In early September, White Rivers revealed that it made a discovery of 11.5 million ounces at 8.9 g/t of gold in the area.

"Other majors who have, I suppose, through the downturn, reduced discretionary spending mainly on exploration and got rid of a lot of exploration expertise within their own businesses see White Rivers and the people that we employ in South Africa as really their exploration arm," Warburton said.

"So we have a great opportunity. In actual fact, we are negotiating as we speak another joint venture with a major."

After receiving the results of a scoping study on the joint venture project with Harmony that indicated a "very robust financial outcome," the partners decided to immediately begin a pre-feasibility study.

As part of the pre-feasibility study, White Rivers is working to upgrade the inferred resource to measured and indicated to add to the reserves of the project.

"About 60% of that current 11.5 million ounce resource is in inferred category and what we're trying to do is increase the category confidence from inferred up to measured and indicated so we can actually include that in our reserves when we release the PFS in February 2017," Warburton said.

Following the release of the pre-feasibility study, White Rivers plans to launch a £25 million to £30 million IPO in March 2017 to list on the London Stock Exchange in late April 2017.

The company is confident that it has strong support in London following a recent investor roadshow.

"Certainly London is open for business, especially for South African gold assets," Warburton told SNL. "The rand gold price has been at a near all-time high and a lot of these African, especially the South African, miners have had a very good run on the market."

"So London and European investors who invest through the London Stock Exchange have always invested in Africa and if we price it right I think we'll be well received within the marketplace."

According to Warburton, Johannesburg, in particular, is going through a transformation, with interest rates of about 7% prompting greater investment.

"There's a lot of money flowing in from Europe and Great Britain as we speak for real estate and other investments due to the returns on your investment as well as you get a bang for your buck at the moment with the rand being so low against the U.S. dollar and against the pound and euro," he said.

By the time White Rivers lists on the LSE, the company expects to have proved up resources on one or possibly two other projects.

"People can see that White Rivers is not only just an exploration company, it's got a clear pathway through to development and production with Harmony, and we've got a number of other projects lining up behind that in the development pathway," Warburton said.

Although the focus for the Harmony joint venture is on increasing the confidence of the resource, White Rivers has also identified the potential to grow the resource and is planning to undertake further deep drilling mid-next year.

Instead of the typical flat-lying reefs found in most South African mines, White Rivers has identified upturned reefs in the western flank that rise upward to within 1.1 kilometers of the surface in the southern portion of the joint venture area.

"We think to the west there is more upturned reefs, which haven't been drilled yet," Warburton said. "So there is a potential to increase the resources."

Following a six-month rehabilitation period, the company will bring two or three rigs to the site to drill the "phase one" area of the large resource in the hopes of extending it further.