conversation with jozsef and jv option

Hi All

Had a conversation with Jozsef re future financing options.

BSR's fundamentals are that they have a 1000 sq m piece of land on the Birimian Greenstone Belt in Senegal.
This is an extension of the rock belt that is already being mined in Mali.

In Senegal
Randgold have a 3Moz + @ 3.9 g/t Au discovery at Massawa

Teranga have 1455 sq m area and are producing open pit 140th oz p.a. moving to 220th oz p.a next year
They have 1.8 Moz @ 1.4 g/t at Sabodala
and 380th oz @ 1.1 g/t at Niakafiri

Oromin have 200 sq km with 1 Moz @ 3.3 g/t at Goulouma
and 0.87 Moz @1.6 g/t
They are about to produce using a heap leach method

Bassari have the land ...... 1000 sq m
There is gold there .... maiden resource 240,000 oz (157,000 oz @ 3.4 g/t)


In Mali (on the same rock system)
Anglo Ashanti & Iamgold have 2Moz @ 2.3 g/t Au at Yatela
Anglo Ashanti & Iamgold have 14Moz @ 2.4 g/t Au at Sadiola
Randgold have 12 Moz @ 4.2 g/t at Loulo
Rangold have 2 Moz @ 7.3 g/t at Gounkoto


One of the really telling points is that Bassari's drill results are all at shallow depths < 100m whereas much of the OTHER COMPANIES RESOURCES ARE MADE UP FROM RESULTS FROM FAR DEEPER DEPTHS.

So why hasn't Bassari gone deeper and drilled more holes .... because it can't afford to drill extensively to prove up reserves even though some of these are anomolies are displaying very high gold at very shallow levels .... Eg: "from trenching work (quartz vein channels) were 75 g/t and 110 g/t over widths of 0.5 metres."

This land will go into production BUT we need more drilling to prove up more resource to justify the business case to start operations as a stand alone operation.

Both Oromin and Teranga are doing joint ventures in an attempt to "land grab" as much of the land as possible before too much has been proved up and the big boys (Anglo and Iamgold) show too much interest.

That's our big asset we've already got the second largest land holding in Senegal in a place where every few weeks there is an increased resource being announced by someone around us.

Terranga also have a mill that they have already started buying bits for to double it's capacity by year end ...... Teranga's problem is they don't have much high grade ore to put through the mill until their permitting is done on Gora and then the overlay is stripped off (they are nominally saying initial activity on site will commence end of 2012 ... it could take another 6 to 12 months to get down to the 120 to 160 m where there higher grade gold is ..... we haven't even drilled that deep !



When i spoke to Jozsef I suggested that he have a chat with Teranga Resources about the possibility of a JV ..... our problem right now is that at $20 M we are in real danger of being taken over for a small premium and the real value disappears into a Randgold / Iamgold / Anglo / Teranga monster.

Since I spoke to Jozsef I notice that Alan Hill (Teranga's Chairman and CEO) is in Australia this week ..... and apparently down in Melbourne today .... interesting ... but hopefully not a TO.




NB: I know that Senegal is the most stable democracy in West Africa ... but I was surprised to find out that Anglo's head office is in Senegal but it has no operations in Senegal !