good read..., page-28

Article from back in 2008 - Has some good background info on amx and our MD - Paul Kitto.

Good reading for slow day anyway .....

Also might be of interest to look at the intial results reported from Konkera in the article (and compare them to the most recent hits at wardaradoo etc..) Good for contextualisation in regards to the likelyhood of wardaradoo, doumbema and foumbirri hosted economic deposits.

Hunt brings Kitto back home
Richard Roberts, 3 November 2008
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ONE Canadian investment bank’s view of declining gold production in Burkina Faso within a few years could prove hopelessly wide of the mark if results from Ampella Mining’s initial drilling at Batie West in the south of the landlocked country are any guide. “Comparing it with everything else I’ve looked at this could be a multi-million ounce camp,” says the company’s new managing director Dr Paul Kitto.

Kitto is no stranger to multi-million ounce gold camps, having developed a new exploration model for the Porgera gold mine in Papua New Guinea that he says continues to add ounces to reserves; been part of the team that found the Raleigh deposit at Kundana in Western Australia’s Eastern Golddfields; and worked with South Africa’s Gold Fields in various key exploration roles including running the company’s program at Damang in Ghana. His five years in West Africa with Gold Fields from 2002 made going back there earlier this year with Ampella after 12 months in Russia “feel like I’d come home”.

“I guess the RBC Capital guys didn’t like getting out of their five-star hotels and into the real world,” Dr Kitto said of the unflattering report on Burkina Faso’s gold potential produced by the investment banking arm of the Royal Bank of Canada in the middle of this year (see HighGrade, July 7, 2008).

“Nobody said Africa was easy. If you want scones with strawberries and cream, then you are in the wrong business.

“Burkina is under-explored with modern techniques and the potential for big discoveries is there for those prepared to do the hard yards.”

Ampella has barely broken a sweat in the West African country – and hardly raised an eyebrow in the market where the real hard yards will need to be made by juniors looking to survive the next 12 months – yet has given its CEO plenty to be enthused about after its initial, unsophisticated drilling foray on newly acquired acreage near the Donko ground Ampella IPO’d with in mid-2007.

Ampella picked up Batie West from a local vendor in July this year. Kitto, appointed CEO in May and managing director this month, insisted on the move even though Ampella had a fair bit on its plate with other gold and base metals targets in Burkina Faso. “I was reviewing all of our projects and Donko was down in that area. We heard there were some leases that were available about 25km away. So I said I’d like to go and have a look. And as soon as I stepped on the ground I said we’ve got to have this. It looked that good,” Kitto said, adding the assessment was based on several factors.

“The amount of workings in the district – on one of the tenements we’ve got there are 5000 artisanal miners, [and] the outcrop ... everything is altered. There are huge alteration systems and when you look at the regional geophysics now you can see multiple parallel structures, so we’re not just looking at one structure, we’ve got several chances of getting economic mineralisation. And the work program that we’ve already completed has demonstrated that.”

Kitto chose Tiopolo at Batie West on which to conduct a rapid-fire surveying, sampling and drilling program because of the abundant surface workings and because “it required a spend”. The vendor had apparently got behind in that area.

In a matter of a few months Ampella has completed a regional soil survey, geological mapping and a rock chip program (40 rock chips came back as more than 2gpt gold samples and 20 were above 5gpt), followed by a high resolution airborne geophysical survey and 3000m of RC drilling on four targets: the clustered Konkera Main, Konkera Cornfields and Konkera Extension and, just to the north-west, Kouglaga. It was the first exploration drilling in the district.

At Konkera Main, four lines of drill holes 80m apart aimed at mineralisation below the 30-50m-deep artisanal workings, returned results such as 6m grading 4.64gpt from 60m, 48m of 2.37gpt from 104m (ended in mineralisation), and 14m of 2.08gpt from 134m. At Konkera Cornfields, hole 12 in the program returned 26m of 5.55gpt from surface, and hole 13 picked up 28m of 3.27gpt from 6m. Hole 10 returned 16m of 1.38gpt from 48m, including 6m of 2.84gpt from 58m, and hole 11 got 10m of 2.1gpt from 26m.

Kitto said other holes in the 21-hole program produced wide low grade intercepts “but once again there were big wide zones of alteration” that required further investigation. The combination of surveys and drilling indicated Ampella could be looking at a 2.5km-wide, 16km-long section of the Botapa shear zone – part of the district’s Boromo greenstone belt – at Tiopolo with “multiple parallel gold bearing structures”.

A close-spaced soil sampling program across the Tiopolo “corridor”, which could take three months to complete, will begin this month.

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Artisanal workings at Batie West.
Investors who punt on junior explorers are placing a bet on exploration success that is rare whether times are good or (as now) bad. True to this spirit, Ampella isn’t going to die wondering about the potential of Batie West. The company had $A2.2 million in the bank at the end of September (less than $A2 million at the time of writing), and a placement in the pipeline. Kitto wants to restart RC drilling in February next year.

“Our plan is to look at what the gold potential in the district is rather than try to prove up a small JORC compliant resource. We’re looking for the multi-million ounce deposits and we think we’re going to find them,” he said. “We want to be able to say whether we’re dealing with 2Moz deposits, or 5Moz deposits, or whatever. That’s what our plan is for the next 12 months ... to give the market an idea of how big this place is and how it’s going to potentially shape up.”

Kitto said other Ampella properties in Burkina Faso may be joint ventured to enable exploration to continue while the company conserves funds. “The focus of the company for at least the next 12 months will be Batie West,” he said.

Kitto heard about the Ampella CEO job while in Russia and was immediately stirred by the prospect of a return to Africa. The geologist and big deposit, or ‘elephant’, hunter gained his initial science degree at the University of Tasmania in 1979 and later completed a diploma of education and honours degree in geology and geochemistry investigation at the same institution. In 1994, he added a PhD to his academic qualifications after studying structural and geochemical controls on mineralisation at Tasmania’s Centre for Ore Deposit Research.

He was principal geologist with RGC, then Australia’s Goldfields and Aurion Gold, from 1998 to 2002, and then became Gold Fields’ Southern Ashanti Belt exploration manager in Ghana. A stint in Tanzania as the company’s East African exploration manager was followed by a further period in Ghana as Gold Fields West African exploration manager and then its African exploration chief.

“I was impressed with the people and the licences,” Kitto said of the Ampella job. “Everything felt comfortable and like a good fit, and I just had the feeling that I could make a difference.

“What I’ve tried to do is understand what we’ve got, understand the people, and then formulate exploration programs that are going to deliver in the short and medium term.”

He made special mention of his vice-president exploration, Dr M. Francois Ouedraogo, who has worked in West Africa for more than 25 years, including for WMC and Resolute.

“He was there at the [Ampella] IPO – he’s a real asset,” Kitto said. “He’s got a PhD in structural geology from France, but he’s a [local] and he knows how things work in Burkina. He’s worked for the government in their geological survey, as well as for western companies. And he just knows everyone, from the ministers down to the bottom. One of the reasons we picked up the Batie West area in quite a good deal is the way he’s able to do business in the country.

“He also brings with him is a team of people who have worked for him for many years and basically wherever he goes they just follow him.”

Kitto said Burkina Faso’s modern foreign mineral exploration phase started with its enactment of the 2003 mining act which, along with political and social stability, had elevated the country’s exploration appeal to the same level as its more heavily explored neighbours.

“Since their mining act changed about 30-odd juniors have moved into the country to explore,” he said. “I think three gold mines have come on line in the last 12 months and there are two more to come on line in the next 12 months. And that’s all just simply because they’ve changed the mining act.

“Also, and it’s certainly been highlighted by others, you’ve got a country with 22% of these [Birimian] greenstone belts but only 12Moz of the gold found to date. Ghana has 19% [of the Birimian greenstones] and 110Moz, Mali 10% and 33Moz, and the Ivory Coast 35% and 8Moz.

“So in terms of political risk I’d say there is virtually none and in terms of the exploration risk I’d say it’s one of the best places in Africa to be exploring.”

Kitto said knowledge of the geological environment in Birimian Shield countries, and development of the exploration and mining industry, was analogous to Western Australia in the late 1970s and 1980s. “Certainly the rocks are very similar, and the nature and style of mineralisation is very similar, and then you have the same weathering profile. The geochem, and structural geology and general geology are all very similar to the goldfields in WA,” he said.

Consolidation of ground, regional exploration and production, which happened belatedly in WA, could come sooner to West Africa.

“With this current financial climate it could be a lot faster than anyone expected,” Kitto said. “I think because the exploration, certainly in Burkina, is still being run and controlled by the juniors, it could be a while. But if the juniors are really starting to hurt then we might see consolidation sooner than previously expected.

“The majors will come where the juniors are making discoveries. [In Burkina Faso] the juniors are just now starting to get reward for effort. I know the likes of Newmont and Gold Fields are now starting to sniff around, looking for opportunities.”

Kitto said raising money in Australia – the course Ampella would be taking – was now problematic for explorers who then had to spend the money in jurisdictions where goods and services were paid for with US dollars.

“The big concern for me right now is the Aussie dollar because our exploration is expensive,” he said.

With a current market capitalisation of about $A3 million, Ampella is barely being assigned value for its exploration properties. Nevertheless, Kitto thinks the company can continue to win investor support. “We’ve got enough interest from enough groups that want to support us to make me believe we’re going to be fine,” he said.

“We’re enthusiastic about what we’ve got and I think the results are going to be very exciting in the next six months.”