Golden signature awaits Konongo
Signature
Metals Ltd is on the cusp of gold
,..)producer status in Ghana's Ashanti gold
belt.
When managing director Bill Oliver spoke
with Paydirt in November the company's
plant refurbishment at the Konongo gold project,
200km north-west of Accra, was 60%
complete but on track for first gold production
in January.
Production is expected to start on time and
within budget so the company can relish gold
prices that tipped $US1,3901oz at the time of
print.
The great thing about this project over the
last year is that everything we said we were
going to do or everything we thought was
going to happen has happened to expectations
or better than expectations. Last quarter
(September) we had some fantastic exploration
results from our exploration campaign
and some excellent drill results. It's business
as usual and business as usual is very good,"
Oliver said.
Throughput at Konongo, 30km along strike
from AngloGold Ashanti Ltd's 50 moz Obuasi
gold deposit, is initially earmarked to be
350,000 tpa via a CIL plant however there is
potential for expansion.
An internal scoping study in the September
quarter revealed throughput could be doubled
and production between 40-60,000 ozpa gold
at grades between 2-3 g/t is possible.
Best of all the potential expansion may
only cost about $US3-4 million and operating
costs could be reduced by up to 15%. Currently
year one production is scheduled for
26,000 ozpa @ 3 g/t gold.
The company is examining that prospect
and has also pledged to spend $5 million
(Signature raised $13 million in September) in
exploration in the coming year.
With the development monkey off its back
early in 2011, Oliver said Signature will be aggressive
in its exploration campaign. Trenching
results including 54m @ 0.22 g/t gold from
Bimma South and 22m @ 1.52 g/t gold from
Kyereben are fillips for a full frontal exploration
assault at Konongo. Funding from production
and its recent raising will ensure that
will happen.
"Trench is a surface technique which is a
precursor so we're really excited to see nice,
wide zones of anomalies that we can then follow
up and drill test as well as higher-grade
trenches such as 2m @40 g/t and 8m @ 3.84
g/t, so there are some pretty good numbers
there.
"We will be in production next year and everybody
is looking forward to that. Cash flow
will make us a lot more flexible and allow us
to grow the company. More and more drilling
and more and more activity on a very exciting
landholding in one of the best addresses in
Ghana is what you'll see.
"We are going to be very aggressive next
year and basically we'll have as many rigs
as we need. We're really looking forward to
putting some serious dollars into the ground
and building our resources to be the equal of
some of the others in the belt."
Other companies with projects in Ghana's
Ashanti gold belt include Perseus Mining
Ltd, Ampella Mining Ltd, Gryphon Minerals
Ltd, Azumah Resources Ltd, Castle Minerals
Ltd, Noble Mineral Resources Ltd and Viking
Ashanti Ltd, all of whom have served their investors
well in the last two years, Oliver said.
He said the companies mentioned were
attractive to investors for various reasons,
whether they are producers or near term, own
production plants or demonstrate burgeoning
growth upside.
Oliver believes Signature has all those bases
covered and hopes for a re-rating in the
market courtesy of becoming a producer and
continued exploration success.
Signature was trading at under 3c/share at
the time of print.
"What has been hanging off us a little bit
is the developer's curse; no one really likes
development but it will demonstrate to people
what we have achieved and hope to keep
achieving over the next six to 12 months.
"Fundamentally we believe we are undervalued
against a lot of our peers and everybody
can find different reasons for that but
at the end of the day there will be a certain
number of drivers that get things going."
Konongo is primarily a gold project however
don't be surprised to see market updates
regarding exploration success in relation to
the manganese potential.
The company reported manganese values
of more than 30% from seven of 19 rock chip
samples at surface.
Manganese occurrences have been
mapped over 1.5km of strike over widths of
150m. Based on results interpreted by Signature
so far its exploration target is 15-54mt @
25-30% manganese.
Signature is assessing the way forward to
exploit the manganese potential at Konongo
and has not ruled out involving a JV partner.
Oliver said it provided the company with the
chance to leverage off another "hot" commodity,
which made Konongo unique.
"Not too many people have multiple commodities;
it's a bit unusual but exciting. Our
primary focus is gold but you don't ignore
things like that when they are on your property
and we will develop it in parallel to the
gold resources. There is nothing wrong with
being in the right commodity at the right time,"
Oliver said.
As Paydirt went to print Signature announced
a resource upgrade at Konongo of
23.4mt @ 1.95 g/t for 1.47 moz gold (over
687,0000z gold indicated).
Mark Andrews
- Forums
- ASX - By Stock
- paydirt
Golden signature awaits KonongoSignatureMetals Ltd is on the...
-
- There are more pages in this discussion • 1 more message in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
CC9
Chariot Corporation (ASX:CC9) refines Black Mountain strategy, launching Pilot Mine to seize U.S. lithium opportunity