gold launched, page-17

Three High Quality African Assets

West Africa remains a region with a lot of “low-hanging fruit” in terms of high quality, large gold discoveries. Thanks in part to recent political unrest in some countries, gold companies operating in the region have been battered. After a lengthy review of West African assets, three were selected; their geology, size, and grades are in line with highly profitable operating mines in the region thus making them desirable targets for takeover. Unfortunately, all three of these are listed on the Australian Stock Exchange, thereby making purchase a bit challenging from here in North America.

Ampella Mining Ltd. (AMX.ASX; APMZF.OTC Grey): $151 million market capitalization. Ampella’s Batie West project in southwest Burkina Faso not only boasts the Konkera resource (indicated and inferred resources of about 3.1 million ounces at 1.6 grams per tonne gold), but it also covers about 100 kilometers of additional prospective greenstone with numerous gold targets. Ampella is fast-tracking this project with a definitive feasibility study due in Q2, 2013.

Burkina Faso appears to be permissive for new mines and reasonably stable. The country holds a huge swath of Birimian greenstone belts, perhaps more than any other West African nation, and Ampella has what appears to be an early position on a very prospective zone. Ampella’s current share price considerably under-reflects the value of this project and could easily double or triple once some traction develops in the gold sector and/or as they grow this resource.

Gryphon Minerals Limited (GRY.ASX): $258 million market capitalization. Like Ampella’s Batie West, the Banfora project (four deposits collectively making up MI&I resources of about 4.5 million ounces at ~2 grams per tonne gold) is situated in southwestern Burkina Faso. All four deposits, as well as numerous untested gold targets, lie within a 20 km radius of the project’s proposed mill.

Like Ampella, Gryphon has an early position on a highly prospective Birimian greenstone belt. Exploration potential appears to be high, so the current resource will likely grow substantially higher. Again, given the underperformance of this stock, a doubling or tripling in share price is within reason.

Papillon Resources Ltd. (PIR.ASX; PAPQF.OTC Grey): $318 million market capitalization. The Fekola project, situated in extreme western Mali, is one of the higher grade discoveries in this part of West Africa. Indicated and inferred resources stand at about 3.1 million ounces at about 2.4 grams per tonne gold. Current exploration will likely expand this number over coming months.