JOHANNESBURG (miningweekly.com) – Aim-listed junior gold explorer GoldStone Resources has been granted an exploration license for its Sangola project by the Senegalese Ministry of Mines.

GoldStone said in a statement that it would now be able to start exploration activities for gold and related minerals, as soon as a decree was issued by the Mining Minister, which was expected to occur shortly.

The Sangola license was granted for three years and may be renewed twice for two further three-year periods. If exploration was successful, the convention prescribes that an operating company will be created, in which the State of Senegal will have a free-carried interest of 10%, with an option to take up a further contributing interest of 25%.

Under the convention, the Government guaranteed GoldStone a minimum interest of 65% in the operating company, as well as taxation exemption during the exploration phases. The convention also included a four-year customs-free status during the development phase, a seven-year tax-free status during the mining phase, and unfettered repatriation of foreign loans and remittance of dividends.

The exploration programme for the permit would start with a structural and regolith study, based on remotely sensed data. A first field visit would serve to identify and map any “artisanal gold-mining” sites.

The results of this work would assist to focus the initial stream sediment and/or soil sampling programme on to prospective structural targets and sites of “artisanal gold-mining”, GoldStone stated.

The field sampling would start as early as possible during the next dry season, from November 2009 to June 2010.

The Sangola license covers about 471 km² and is situated 60 km south-east of Tambacounda, the largest city in eastern Senegal.

The directors believe that the license area is highly prospective because it is largely unexplored and covers the southern part of the main Transcurrent fault zone (MTZ) of the Kenieba Inlier of Birimian formation.

Historic exploration of the Kenieba Inlier have resulted in the discovery of more than 20-million ounces of gold. North of the Sangola license the MTZ yielded large gold deposits/mines such as the 3,4-milion ounces Masawa deposit, the 2,2-million ounces Sabodala mine, the two-million ounce Yatela mine, and the 10-million ounce Sadiola mine.