TORONTO (miningweekly.com) – Exploration junior Giyani Gold on Wednesday said it continued to work towards recovering funds owed to it by South African State-owned Corridor Mining Resources (CMR), its joint venture partner on the Giyani gold project, in Limpopo.

TSX-V- and JSE-listed Giyani believed that the project area still held significant potential for new discoveries and that sizable gold resources remained close to historic mining sites contained in the prospecting rights.

Giyani and CMR, which the Limpopo Economic Development Agency owned, had agreed to share all exploration expenditures incurred on the Giyani project on a 50:50 basis.

Giyani had last year February announced that its continued exploration plans for the Giyani project hinged on CRM paying its share of the 2013 exploration programme, which, at that time, amounted to about R2.8-million (C$300 000).

The company did not on Wednesday state the amount it was seeking to recover, but the exploration costs were recorded in a loan account with subsidiary Rock Island, where interest on the unsecured loan accrued at South African prime +1%, with no fixed repayment terms.

Giyani's exploration permits that comprised the Giyani gold project remained in good standing, but were expiring in July. The company was holding conversations regarding increasing its ownership position in the region.

On its website, Giyani stated that owing to the difficult current market, it was rather focused on completing a transaction to acquire a more advanced, cash-flow generating project.

"Giyani has entered the New Year with several opportunities in the resource sector and a strategy that when executed will fuel our growth while protecting our loyal shareholder base. We have strong prospects and a committed team of professionals working for a common goal and I am confident Giyani will deliver success in 2015,” executive chairperson Duane Parnham said.

OPPORTUNE TIMING

Parnham characterised the current gold market as showing signs of improvement, while simultaneously, the TSX-V index was hitting historic lows and showing signs of bottoming, which Giyani felt provided an ideal environment to conduct transactions in the resource sector.

“I am firmly committed to building Giyani into a company that will benefit its shareholders. We've taken internal measures to reduce our expenditures, reduce our contractual obligations without penalty fees and, with the aim of preventing any dilutive financing, no one on our management team or board of directors has drawn a salary since November 2014,” he said.

Further, with a 44.6% interest, Giyani was the largest shareholder of Canoe Mining Ventures, which is focused on exploration and acquisitions in Canada.

Parnham was appointed president and CEO of Canoe on October 2 and, since that time, had worked towards consolidating the Shebandowan copper/gold belt, north of Thunder Bay, in Ontario; most recently, executing a transaction to acquire a project from Glencore.

Giyani had signed a voluntary escrow arrangement with Canoe to align with other escrowed shareholders and protect the value of Canoe with the right balance of liquidity, should it be needed. The company believed that Canoe's strategic position and compliant gold resources would contribute significantly to the Giyani balance sheet in 2015.

The company also noted that the agreement between itself and the shareholders of Horizon Enerji and Sumo Coal had expired on December 31.

"Giyani worked very hard and gathered great public support in moving a transaction forward with Horizon and Sumo. It is unfortunate that, in the face of poor market conditions, the consultant we retained was unable to assist in concluding this transaction; however, we still hold an exclusive agreement, with no termination date, with this individual,” Parnham advised.

Giyani continued to work with Lambert Private Equity and the financing facility remained a source of capital that could be leveraged as its 2015 strategy was executed.

While the company noted that there were no guarantees that it would conclude a transaction this year, the management team was pleased with the quality of the opportunities, currently in the early stages of evaluation, that had been made available to Giyani.

The company, in October, struck an all-scrip deal to acquire a fully permitted crude-oil-storage and dry bulk cargo port development in Turkey, known as the Ceyhan project.

The junior simultaneously announced that it would buy Sumo Coal, a cash-flow generating coal operator in South Africa.