……..As Wa Gold Project make major strides
Story: Mohammed Abu.ADM, Accra
Australian Azumah Resources Ltd recently reports, the Bepkong deposit under its flagship Wa Gold Project, in Ghana’s Upper West Region hit high-grade gold zones 580 metres below surface.
Azumah’s Managing Director, Stephen Stone and joint venture partner Ibaera Capital’s boss and geologist, Dr.John Hronsky who had every cause to rejoice, sought to update proactive investors on the extended gold mineralization discovery.
“Recent drilling at the Bepkong deposit delivered results including 15.5 metres at 5.17 g/t gold from 401 metres and deep gold such as 2.5 metres at 3.55 g/t from 710.5 metres.
“Deep mineralization at the Bepkong deposit is not included in the Wa project’s current 2.5 million ounce JORC resource”.
Stone adds the drill rig has been shifted to the company’s bigger Kunche deposit, 2.5 kilometers south of Bepkong.
This comes as further booster to Stone’s report in late January wherein stated, “The Wa Gold Project is now transformed into an extremely compelling development opportunity, without even considering the evolving prospect of underground mining presented by the recent discovery of high-grade below-pit mineralization at Kunche and Bepkong,.
“Full-credit to our joint venture partner and project manager Ibaera Capital which has increased ore reserves by 65% to over 1 million ounces and redefined the project with operational and financial metrics that unequivocally re-position it up with its peers.
The Wa Gold Project Stone had disclosed , “is now well primed to be Ghana’s next commercial-scale gold mine, with mining leases already granted, EPA permits well advanced, grid power to site and the strong support of the Ghana government.”
A revised feasibility study is expected in about the September quarter, while a funding package is a hoped-for inclusion and final investment decision expected by the December quarter.
Construction approvals and progress in 2020 and beyond Gold market sentiment during key decision-making points and development decision milestones
What is on Offer
The key asset is the Wa Gold Project in Ghana’s Upper West Region, near the Burkina Faso border and just 10 kilometres from regional capital Wa.The 2,400 square kilometre project has a number of tenement blocks.
These include the 2,177 square kilometre Wa-Lawra block in the west and the Wa East block which includes the Josephine and Julie- Collette licence blocks.Ore reserves at the project are 18 million tonnes grading 1.77 g/t gold for a 1 million ounce contained ore reserve. Contained resources are 2.5 million ounces.
A sum of 34,800 ounces of inferred material in the mine design was not able to be included in the ore reserve.Another 156,000 ounces of inferred material in the pit shells could be added to ore reserves at a later date if sensitivity analysis can be employed during pit optimisation work.
An updated feasibility study for open pit operations at the joint venture project is being worked on this year, with an activities report released in January revealing the study had modeled an 11-year operation producing about 107,000 ounces of gold a year in its first six years.
Now valued at US$177 million ($249.9 million) with a before-tax and post-government royalty net present value (NPV5) calculated at a 5% discount, the project has a before-tax and after government royalty internal rate of return (IRR) of 35%.Expected net cash flow before-tax and after government royalty is US$270 million.
The expected grading in the first eight years is about 2.06 g/t gold, while average life-of-mine gold recovery would be 91% and average life-of-mine plant throughput 1.6 million tonnes a year.Establishment capital is US$117 million while capital payback is a short 1.6 years.
Viewed as a compelling development opportunity by the company, the project is expected to have a low cost of US$114 per ore reserve ounce and an all-in sustaining cost (AISC) of US$886 an ounce.
.Azumah’s project manager and joint venture partner on the project is Perth-based private equity-funded exploration and project development company Ibaera Capital Advisers Pty Ltd.
PE group fund Ibaera Capital Fund LP is funding exploration and development studies funded for up to a 47.5% interest in the Wa project, backed by the more than US$1 billion fund-of-funds.
Ibaera came on board as a joint venture partner in October 2017 and has an accomplished multi-disciplinary team that is managing all work.
The fund’s team come from backgrounds at major Australian players Fortescue Metals Group Limited (ASX:FMG) (FRA:FVJ) (OTCMKTS:FSUGY) (OTCMKTS:FSUMF) and BHP Billiton Limited (ASX:BHP) (LON:BHP) (NYSE:BHP) and its acquisition WMC Resources Limited.Successful West Australian geologist Dr Jonathan Hronsky leads the technical team.
Ibaera and Azumah’s feasibility study for the project will be finalised over the course of the first nine months or so of this year as the partners prepare to make a development decision later in the year.
The Perth fund hopes to deliver a revised blueprint for funding and development of Wa project with the study pencilled in for finalisation in the September quarter.
Before Ibaera completes the feasibility study, a number of opportunities to improve operational and economic performance may be explored.
These include assessing the option for further underground mining underneath the Kunche and Bepkong pits and evaluating and incorporating results from further exploration at the project into the study. A drilling program of more than 40,000 metres is underway at Wa project.
Azumah had $1.4 million (US$1.1 million) cash at the end of the December quarter and expects $350,000 of cash outflows this quarter as it directs $50,000 of its own funds to exploration in this period.
Ibaera agreed to pay for all exploration and development studies for two years as part of its two-stage US$13.5 million project earn-in.
Azumah Resources Limited specialises in exploration and development in the West African nation of Ghana.
The Wa Gold project is run by Stephen Stone, a geologist who has more than 30 years project evaluation, executive management, corporate development and operational experience in the international mining game and boasts a stint in Zambia’s open pit and underground mines on his CV.
The promoters have expressed their commitment to at all times uphold best industry practice and maintain social impact sensitivity.This is premised on good engagement with communities in the project area.A shea butter project is already being earmarked as part of Azumah’s Corporate Social Responsibility(SCR)
Also view below Joint TV interview of the Partners