By: Dylan Sikes - AllPennyStocks.com News

Tuesday, January 27, 2015

As we’ve mentioned before, the beat-down on gold and junior gold plays listed on the Toronto Venture exchange has resulted in some companies halting operations and others jumping ship into completely different industries, often times the legal marijuana market. Just shy of a year ago, it looked like Vancouver-based African Queen Mines Ltd. was going to join that list of companies with a change in business, signing an agreement to acquire Calgary-based XORTX Pharma Corp. The deal was structured as a reverse takeover, where African Queen Mines (TSX-Venture:AQ) would do a name change and become a bio-pharmaceutical company developing uric acid lowering agents to treat diabetic nephropathy, hypertension, insulin resistance, metabolic syndrome and diabetes. The merger was later cancelled due to the failure to meet financing conditions requiring a capital raise of at least $3 million. So, African Gold Mines said it was rededicated itself to build value from its portfolio of gold projects, consisting of the Rongo Gold Fields Project and Ugunja Gold Project in Kenya and the Noyem-Nyafoman Gold Project in Ghana.

Last September, the company said it was divesting part of its portfolio by selling its Ghana assets as it continued to restructure and “develop strategies for maximizing value from its portfolio of resource properties in Kenya.” This deal went through, with African Queen Mines saying on Tuesday that the sale of 100% of the shares of its Ghanaian operating subsidiary, AQ Ghana Gold Ltd., to AKA Petroleum Ghana Ltd. for $1.0 million and a 2% net smelter royalty has been closed.

The money from the sale is not all going to African Gold Mines. JV partner Akan Exploration Ltd and Newmont Mining (NYSE:NEM), who previously owned the underlying exploration license, are getting a cut too. Gross proceeds in the sale for African Gold Mines is $475,000. Additionally, African Gold Mines is entitled to a net smelter royalty on future gold production under the property’s license in the sum of one-half of one percent.

The area under license comprises two non-contiguous blocks aggregating approximately 30.23 square kilometers. The property is in the prolific gold-producing Ashanti Gold Belt and near Newmont’s Akyem deposit that is currently in development, as well as about 100 kilometers for AngloGold Ashanti’s world-class Obuasi Mine.

Shares of AQ where rising early in 2014, from 2 cents each up to a 52-week high of 5.5 cents before the proposed merger with XORTX, which resulted in a halt on trading from March all the way through August as the transaction was trying to be closed. When it didn’t the stock price sunk immediately to a 1.5 cents, then to a penny, and now to current levels at $0.005. Investors aren’t even reacting to the cash from the sale, which at $475,000 is more than the company’s market capitalization of $405,670 (source: Quote Media).

With a lighter portfolio and a heavier bank account, stakeholders will now be looking to what’s next for the company and some activity that can breathe some life back into the stock.

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