Gold explorer Azumah Resources (ASX: AZM) reported the latest drilling campaign had kicked-off at its flagship Wa gold project in Ghana, ahead of feasibility and reserve updates which are expected in the coming weeks.
The 40,000m drilling program will focus on upgrading the project’s current resources and reserves to underpin a final development decision which will be made in late 2019.
Speaking with Small Caps, Azumah managing director Stephen Stone said the company had already firmed up 624,000 ounces of contained gold in reserves and was hoping to boost this figure closer to 1 million ounces of contained gold.
“We’ll be taking a major step towards that by the end of this year and we hope the drilling that we are doing now will take us pretty much where we need to be next year,” Mr Stone added.
Perth-based Ibaera Capital is earning a 47.5% stake in the project by spending US$13.5 million ($17 million) on exploration.
As a result, Mr Stone said the project is fully funded through to a development decision.
A feasibility study was published on Wa back in 2015 and estimated a 90,000ozpa operation over seven years.
Mr Stone said the current feasibility study was a “complete revamp” and update on the 2015 study, with the company looking to commission a larger operation that has a mine life between eight to 10 years.
“The project is going to look a lot better,” Mr Stone said.
He added the numbers were all “heading in the right direction” with capital and operating costs coming down “quite significantly” on 2015 projections.
In addition to upgrading resources and reserves, drilling will explore extensions to high-grade mineralisation found at the project’s Kunche, Bepkong and Julie deposits as well as discovering new prospects.
In May this year, Azumah reported it had unearthed a “game-changer” gold intersection at Kunche, which was 44m thick. The intersection was from 99m and graded 5.37g/t gold, with two higher-grade zones of 27m at 7.86g/t gold and 20m at 10.27gt gold, including a 1m interval of 144g/t gold.
“We are going to drill under those to see if there’s any continuity to the high-grade mineralisation,” Mr Stone explained.
He added the results, if good, would introduce the opportunity for an underground development as well as the initial open pit operation.
Wa gold project and Ghana
Wa encompasses 2,400 square kilometres in Ghana and has a global resource of 2.5Moz contained gold.
The 2015 feasibly study was based on an ore reserve of 9.1Mt at 2.14g/t gold for 624,000oz of contained gold.
According to Mr Stone, Ghana is “very supportive” of mining, with the country hosting a “well-established” mining sector.
“Ghana has an 80-year history in mining. It’s got some of the biggest gold mines in West Africa, and, in fact, the world.”
“Companies like Newmont (NYSE: NEM), Anglo Gold Ashanti (ASX: AGG) and Goldfields (NYSE: GFI) all operate there,” Mr Stone added.