After establishing a maiden mineral resource at its evolving Afema gold play in the West African nation of Cote d’Ivoire, a West Australian ASX-listed junior has since released another set of mouth-watering drill results which look set to add more yellow metal ounces to the project’s growing inventory.
During the September quarter Perth-based Turaco Gold Ltd (TCG) delivered a JORC-compliant mineral resource estimate for the exploration project, which sits 120 kilometres east of Abidjan in the country’s south-east, of 2.52 million gold ounces at 1.2 grams/tonne covering three deposits ‒ Woulo Woulo, Jonction and Anuiri.
It excludes other mineralisation found along the Afema Shear, including Asupiri, Brahima, Adiopan and Toilesso, which will be subject to further drilling and metallurgical test work.
During the first half of November, TCG announced it had completed 10 RC maiden holes along the undrilled (plus) 10km Niamienlessa Trend, which returned highly encouraging initial results from what the company believes is “a newly discovered moderately dipping zone of shallow gold mineralisation”.
Yellow metal intercepts from Niamienlessa SW, located less than 10km from Woulo Woulo, Jonction and Anuiri, included 12 metres at 6.72g/t from 18m (including 6m at 11.85g/t from 18m), 27m at 1.30g/t from 34m (with 12m at 2.24g/t from 39m), 15m at 2.11g/t from 22m (containing 8m at 3.41g/t from 23m), 13m at 1.23g/t from 22m, 26m at 1.04g/t from 71m as well as 16m at 1.18g/t from 32m.
These results are from the central portion of the 2km anomaly, where past trenching has returned 18m at 1.91g/t and 12m at 1.21g/t.
The first pass drilling targeted two sub-parallel anomalies extending for 2km and 1.6km each, with further results pending.
It only tested the top (approximately) 80m of oxide material from the surface.
Predominately, oxide mineralisation was intercepted, while broad mineralisation extending into fresh rock was observed.
The Afema Shear sits in the Greenstone belt and shear zone extensions from Ghana’s gold districts of Bibiani and Chirano (where Canadian Asante Gold Corporation has the two namesake mines), while the Nianemlessa Shear is an extension of the country’s Asankragwa Shear, which hosts Obotan (Asanko Gold Ghana Ltd) and Keegan Resources Incorporated’s Essase development. The total project area spans about 1,267 square km.
Afema’s geology is dominated by metasediments (sandstone and shale) and volcanogenic sediments, while mineralisation is characterised by silicification with finely disseminated sulphides in the transitional and fresh mineralisation.
RC drilling is ongoing, with first-pass drilling currently underway at the untested Affienou prospect at the southern end of the Niamienlessa Trend. It is characterised by extensive high-tenor soil anomalism supported by positive trench results ‒ including 28m at 3.06g/t and significant active artisanal mining activity exploiting in-situ saprolite mineralisation.
In addition to the RC work, Turaco now has two diamond rigs operating on-site targeting shallow extensions to mineralisation on the Afema Shear at the Jonction, Anuiri and Asupiri deposits. This material was excluded from the maiden MRE.
Afema is on a granted mining permit supported by a mining convention between Afema Gold SA (permit holding entity) and the Côte d’Ivoire government.
This permit covers 227sqkm and was issued in
December 2013. It is valid until December 2033, with a 20-year renewal option thereafter.
The project recently garnered the interest of the brokerage community, with two investment advisors initiating coverage of TCG during the second half of September.
First cab off the rank was Euroz Hartleys (EH) Mike Millikan, who said while recognising key de-risking milestones were still ahead for the junior in regards to completing feasibility studies, it was comfortable that the company had confirmed good base resources from which to build criteria mass and thus underpin value.
“We anticipate more discoveries to come, noting TCG continues to generate targets for drill-testing,” Millikan said.
“Côte d’Ivoire currently has a relatively low risk of political unrest and a government supportive of foreign investment.
“The regulatory framework in mining is generally favourable, and security issues are limited and manageable.
“While some challenges exist, they are typical for emerging markets and do not significantly impact the country’s overall investment appeal.
“However, there remains a geopolitical risk of investing in Côte d’Ivoire (and West African countries in general) and we remind investors of this.”
In addition, EH pointed out that while resources had been delineated, ongoing drill success could not be guaranteed, given development studies had yet to be completed.
“However, we consider TCG’s tenure to be highly prospective and anticipate both resource extensions to existing deposits, and new discoveries,” Millikan noted.
“We also anticipate feasible development studies for an attractive gold operation (in the future).”
Meanwhile, Canaccord Genuity (Australia) Ltd’s Paul Howard and Reg Spencer looked a little further into the future, with their valuation of TCG based on a hypothetical mining scenario for Afema, where the assumed gold production scenario was 38.5Mt at 1.2g/t for 1.51Moz based on the indicated resource as recently defined.
Moreover, as drilling was ongoing and uncovering ounces outside the resource, this should be viewed as an initial base case scenario that highlighted the “significant value already present in TCG today”.
“We model a 10-year open-pit mining operation at Afema, fed by the three deposits currently in resource,” Howard and Spencer said.
‘Woulo Woulo provides around 2.8 to 3Mtpa of foundation base feed over the life of mine (LOM), with Jonction augmenting Woulo Woulo for the first five years and Anuri providing additional feed for the last five years of our modelled ‘mine plan’.”
Canaccord predicted LOM production would average 130,000ozpa, with this figure being 169,000ozpa in the first five years of operations.
Meanwhile, all-in sustaining costs would average US$1,250/oz, with upfront capital of US$300 million assumed for a 4Mtpa plant.
Additionally, strip ratios should level out at 4.0:1 over the LOM, with recoveries modelled at 85 per cent owing to the clean, free milling ore at Woulo Woulo blended with the sulphide material from Jonction and Anuri.
“And this is before we even consider underground potential and exploration success on adjacent shears,” Howard and Spencer noted.
Judging from TCG’s latest announcement regarding Niamienlessa, Canaccord may soon have to complete an updated investment note taking these factors into account.
