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Sep 2010 - PDU Fires up...

PDU fires up the West African Golds

Any doubts anyone may have had about Burkina Faso being the current world exploration “hot-spot” were quickly dispelled by the behaviour of the West African gold shares in the week of PDU (Paydirt Down Under) in early September 2010.

As illustrated by Gryphon Minerals (Paydirt’s Gold Mining Explorer of the Year in 2009) share price, increasing by 28% from A$0.80 to A$1.025 in the week to Friday 3 September, and continuing in the following week to the 10 September to A$1.145 (for a 43% increase over the 2-week period).

Gryphon (GRY) reported that its Banfora Gold Project as shown in Figure 1, now has a resource of 1.5moz based on 21mt @ 2.2g/t. However, that excludes the very encouraging deeper intersections at Nogbele such as 14m @ 2.6g/t and 10m @ 4.3g/t in the stacked lode system plunging to the north. These intersections infer that Nogbele may be the key/main orebody in GRY’s Banfora Project’s goldfield (every goldfield usually has one main orebody), and perhaps GRY can achieve a 2moz resource in its next upgrade in early 2011, on its way towards completion of feasibility studies possibly by the end of 2011, with a path heading towards production.

Ampella (AMX) also had encouraging intersections as its share price rose by 26% to $2.14 by 3 September and continued to $2.40 by 10 September, undeterred by its 10 September announcement of a several times oversubscribed $42m placement at $1.95 to fund exploration.

Golden Rim (GMR) doubled to 17c within the PDU week, after reporting initial encouraging results from their new properties in NW Burkina Faso (previously they had been unsuccessfully and more costly exploring in Fiji). GMR stated that they had completed 17 deals on 17 licences in Burkina Faso in the past 3 months. GMR also have exploration prospects in Mali, and a number of assay results were due.

Rick Yeates presented his new IPO on Middle Island (the seed investors are apparently from the Kalgoorlie Yacht Club), which was expected to list in about October 2010, with prospects near Blackthorn’s Perkoa and in NW Burkina Faso.

Even Azumah continued its ascendance, up 32% to 65.5c during PDU week on its Wa prospects (being the other half of Ampella’s Batie West, but on the other side of the Burkina Faso border, in Ghana).

And apparently there are a number of new junior companies coming from both Australia and Canada.

Following the shear zone / major structure focus of Ampella, was Bassari (BSR) along the southern boundary of the inlier that contains Sabodala in Senegal. BSR’s share price has risen by 40% in the past two weeks to 10 September.

At the PDU conference we noticed two new trends, namely South African and Canadian companies looking to list on the ASX as a means of raising funds (instead of focusing on the TSX), and whether it has been due to Australia’s RSPT, but the sovereign risk of a number of countries in the world has become lower.

New IPOs are coming from Nigeria and Niger, there is a gold company in Nigeria with a market cap of over $400m. Anvil in the DRC looked like a turnaround story. Red Back’s new mega gold mine is in Mauritania (GRY’s new acquisition is in Mauritania too). Mali appears to be a hive of activity etc.

And yet, at Diggers, it was reported that Newmont has stopped all its Australian exploration due to Australian Mining Tax risk uncertainty. Should Australia continue to rattle the mining tax sabre, one of the main beneficiaries is expected to be the gold mines of West Africa – where discoveries have so far been plentiful and appear likely to continue.

Disclosure and Disclaimer : This article has been written by Keith Goode, the Managing Director of Eagle Research Advisory Pty Ltd, (an independent research company) who is a Financial Services Representative with Taylor Collison Ltd, and with his associates, may hold interests in some of the stocks mentioned in this article. The opinions expressed in this article should not be taken as investment advice, but are based on observations by the author. The author does not warrant the accuracy or completeness of any information and is not liable for any loss or damage suffered through any reliance on its contents.

  • Written by: Keith Goode
  • Wednesday, 01 September 2010

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