I should declare that I work in the industry and know the ground quite well.
I was very sceptical at first. Konongo was one of Ghana's first major gold producing mines. The perception in the industry was that it had largely been mined out.
But SBL have done a terrific job in showing that the ground still holds lots of gold. Also, I can't emphasise enough the benefits of having a plant already on site. Its not only the savings on the CAPEX, but deal flow will come to the company from landholders around the area.
Also the tailings will produce quick cash flow at very low costs.
Most of their exploration has been conducted on the old workings - naturally enough. Once they get going on regional exploration targets, this is when things will get very interesting. Plus they are yet to drill at depth. I will be very surprised if they didn't build up a resource base of 3 million ounces eventually on their current land holdings. If they can start accumulating some of the ground around Konongo from deals, realistically they could eventually grow the region to 5 million ounces plus.
SBL Price at posting:
2.6¢ Sentiment: Buy Disclosure: Held
