goldstone q and a with management

Monday, 12 December 2011 14:57 Goldstone Resources – December Q&A with Management Featured
Written by MiningMaven


With projects in Ghana, Senegal and more recently Gabon, the company is poised to create substantial value for investors, particularly now they have the funds needed to ramp up their operational activities across the board; building a substantial JORC in Ghana and getting their teeth into their highly prospective Gabon licenses.

More recently, GoldStone's development has attracted the attention of (what was then Bendigo Mining, now named) Unity Mining, who have a declared holding of 33.6% of the company and clearly consider GoldStone as more than just a strategic investment.

A look at Unity's latest investor presentation clearly demonstrates the significance they place on their stake in GoldStone and the extent to which they view Goldstone as a core part of their ongoing business activities.

This was further evidenced by Unity’s willingness to participate in GoldStone's recent £4.7m fundraising. Unity kept their holding percentage constant taking one third of the placing shares and investing £1.58m. Also Unity have now signed an irrevocable agreement committing them to make a full offer for Goldstone should their holding exceed 49% of the company’s shares in issue and to participate in the Disclosure and Transparency Rules relating to notifiable movements in shareholdings. This is key, as it highlights Unity’s commitment to a pathway in line with the expectations of the UK markets and investors in general. By committing to these formalities the company has clearly stated a desire to follow a professionally acceptable course which should reassure management and investors that, in Unity Mining, the company has a reliable and trustworthy partner.

Of course there has been speculation about Unity’s intentions, and why not? We are all interested. But on a practical level Unity Mining’s experience in mine development marries very well with GoldStone’s exploration capability. GoldStone is also something of a business development star, having assembled a prime portfolio of projects in the most prospective parts of Africa. The prospects in Gabon are enormous, and developments to date in Ghana and Senegal have been impressive. So it makes sense that any company wishing to have access to an explorer with major growth potential would look in GoldStone’s direction.

With all this in mind, and with excitement bubbling away, but with market sentiment in the doldrums, we though now would be a great time to ask management a few questions, on behalf of our readers. The company, once again, obliged:

MM: Can you explain the status of your ongoing relationship with Unity including the corporate update provided to market recently?

GRL: Unity, as our strategic partner in terms of the alliance we concluded with them in May last year, is not only a cornerstone investor but also a credible miner who sees us as an avenue into assets that have the potential to be exploited. The relationship is one of mutual commercial benefit and that is why Unity has agreed to support the introduction of disclosure and takeover provisions, which previously were not part of GoldStone’s regulatory environment. Although there were some management changes at Unity that apparently created some uncertainty in the market we strongly believe that Unity’s recent participation in the fund raising and its undertaking to vote in favour of the above provisions only points towards a commercial relationship that has reciprocating benefits and advantages in mind between the two companies.

MM: You have stated a desire to extend the Homase/Akrokerri resource to achieve critical mass. What do you mean by ‘critical mass’ and what are the key corporate strategic objectives in relation to the Homase/Akrokerri project?

GRL: ‘Critical mass’ in the context of Homase/Akrokerri resource means a code compliant resource of sufficient magnitude to justify consideration of a scoping or pre-feasibility study. To qualify a resource to be of adequate size or reaching ‘critical mass’ is primarily dependent on the gold price, average grade of the resource, metallurgy and the existence of high grade zones and/or oxide ore that can be exploited early to accelerate amortisation benefits. We believe critical mass in the case of Homase/Akrokerri could be one million ounces or less.

MM: What are the operational steps that will be undertaken over the next twelve months at Homase/Akrokerri and what should investors look for from the project in terms of news flow over this period?

GRL: We will be adding another drill rig at Akrokerri to explore underneath the extensive soil anomaly over the granite and will continue drilling underneath the existing resource as we have done for the past 6 months. In addition we intend to execute a geophysical survey over large parts of the Homase/Akrokerri project area in order to identify exploration targets for follow-up work. This work may help us to delineate the Homase trend south of the existing pits where previous explorers seem to have lost it and to investigate the existence of mineralisation in structures parallel to the Homase/Akrokerri resource.

MM: You have demonstrated some excitement with the discovery of surface gold anomalies in Senegal. Could you outline the work you have completed thus far, your results and what you are planning to do over the next twelve months to take the Senegalese projects forward?

GRL: A permit-wide termite mound sampling programme was concluded and yielded three large and compelling gold anomalies. These anomalies appear to overlie splays off the MTZ or structures parallel to the MTZ. In-fill sampling over the anomalous areas was completed recently and the samples have been received by a laboratory in Cape Town. We expect to have results for these latest samples in January and will test the most promising targets will an extensive RAB drilling programme during the first half of 2012.

MM: You have two licences in Gabon, Oyem and Ngoutou. Could you remind us why you consider these licences to be highly prospective for gold mineralisation?

GRL: Both gold in soil anomalies are 15 km’s long and located in completely unexplored territory. The streams that drain the anomalous areas contain gold which is exploited by artisanal miners. The gold in soil anomaly associated with the Oyem permit in the northern part of Gabon covers a splay off a well-known regional geological structure in gold-prospective Archean rocks. The Ngoutou anomaly in the central part of Gabon correlates with the contact of amphibolite rocks and gneiss, both of which are of Archean age. Similar geological settings have yielded large gold deposits elsewhere in Africa and beyond.

MM: Since securing these licences what have been your key operational objectives on the ground and what has your work to date achieved?

GRL: Both license areas have been reconnoitred from a geological and logistical perspective. We have opened an office in Libreville and have employed a number of staff to assist us in our exploration efforts. A camp has been built in Oyem and some in-fill soil sampling has been concluded there too. We have also commissioned our scout mobile drill rig at Oyem.

MM: Looking forward what work are you planning to do on the ground in Gabon and what are you hoping to achieve from this?

GRL: Both licenses require drilling. Diamond drilling at Oyem can commence once the results for the in-fill soil samples have been received and once a drill rig has been contracted. We are optimistic that this will be the case during the first quarter of next year. The Oyem target appears to be very obvious and we believe that we will understand very early during the drill programme if this compelling soil anomaly can hold its promise. At Ngoutou we will have to complete the construction of a field camp before we can commence with more geological work next year.

ENDS