Pure gold play Megado Gold (ASX: MEG) makes its debut on the ASX today and will hit the ground running with a maiden drilling campaign slated to start in the next two weeks.
The Ethiopia-focused explorer already has extensive sampling, mapping and trenching underway on its projects.
Its listing follows a strongly supported $6 million initial public offering (IPO) which closed early last month.
Maiden drilling program
Drilling is scheduled to start by early November at Megado’s 80% owned Babicho project, targeting a significant 2km long gold-in-soil anomaly with outcropping gold-bearing quartz veins.
Drill pad preparation is currently being completed at the first prospect within the project, Megado reported on Tuesday.
Drilling will then move to its 100% owned Chakata project, located 5km along strike from the 3 million-ounce Lega Dembi and 600,000-ounce Sakaro gold mines, operated by MIDROC.
Megado managing director and chief executive officer Michael Gumbley said “a significant number of new targets” are being identified by teams on the ground and a “substantial” trenching program is planned with a number of historical trenches being re-opened and extended, in addition to numerous new trenches.
The company also expects to double its full-time on-ground geologist team from six to at least 12 local employees to fast-track the on-ground review of anomalies and first-pass grass roots exploration across its holdings.
Ethiopia in focus
Megado holds interests in six Ethiopian gold projects covering 700sq km including five granted permits and an additional licence application.
It has 100% interests in the Mormora, Dawa and Chakata projects and 80% stakes in the Babicho and Chochi projects in partnership with local Ethiopian partners.
Once awarded, the Dermi Dama licence will be owned 100% by the company.
Megado’s focus on Ethiopia coincides with the country’s government looking to attract international investment in its rich but underdeveloped gold sector with the aim of generating about 4.4 million ounces of gold production over the next decade.
Some large gold deposits in the country include MIDROC’s 3Moz Lega Dembi and 600,000oz Sakaro gold mines, KEFI Minerals’ 1.7Moz Tulu Kapi deposit and Allied Gold Corp’s 1.5Moz Dish Mountain deposit (discovered by Megado technical director Dr Chris Bowden).
“Fundamentally important to us as emerging gold exploration leaders in Ethiopia, as well as to our success as a company, is building a strong relationship with the local communities and stakeholders around our project areas,” Mr Gumbley said.
“Our impact investment approach to gold exploration will create life-changing prosperity for our local partners which will, in turn, ensure the success of our company.”
Megado’s offer of 25 million shares at $0.20 each closed early last month after being “significantly oversubscribed” with the company able to accept $1 million in oversubscriptions to raise a total $6 million.
It will hit the boards with 71.5 million shares on issue (plus $6 million in cash from the IPO), valuing the company at $14.3 million.