Vancouver developer jumps on maiden Ghana resource
Asanko Gold Inc. (TSE:AKG) stock jumped 4.6% on Monday after releasing positive maiden resource estimates for the Nkran Extension at its eponymous gold project in Ghana and progress towards bringing two other satellite targets into production.
If afternoon dealings the stock changed hands at $4.32, on the New York Stock Exchange, affording the company a market worth just over $820 million. Asanko shares are up three-fold since the start of the year.
In a statement, the company said that it's currently evaluating three near surface exploration targets within short trucking distance of existing processing plant: Nkran Extension, Adubiaso Extension and Akwasiso:
- Nkran Extension resource estimate completed: Measured & Indicated Mineral Resources 758,658 tonnes at 1.76g/t for 42,930 contained ounces of gold at 0.8 g/t cut-off.
- Adubiaso Extension resource estimate previously announced: Measured & Indicated Mineral Resources 628,600 tonnes at 1.89 g/t for 38,250 contained ounces of gold at 0.8 g/t cut-off.
- New larger target, Akwasiso, focus of current drilling with 4,200m drilled to date and a Mineral Resource Estimate expected in Q4 2016.
- Supplementary Environmental Impact Studies for Adubiaso Extension submitted to relevant Government regulatory bodies, Nkran Extension scheduled for submission by end of Q3 2016. Permits expected in time for commencement of mining in early 2017.
The Vancouver-based developer brought the Asanko mine into production in January for a capital outlay of $295 million and ramped up to steady state production of 190,000 ounces per annum in the June quarter.
Peter Breese, President and CEO of Asanko said: “The three current exploration targets offer immediate, low-cost, incremental ounces that will keep our “hungry” mill full for the next two years while we develop our Phase 2A expansion project. These near-surface deposits are now being incorporated into our Life of Mine Plan, with mining targeted to commence in early 2017."
Asanko's Phase 2 project is the development of the Esaase pit to mine up to 10 million tonnes per year including 2mtpa of oxide ores in the initial stage. A definitive feasibility study for the Phase 2 is expected before October.
In a research note Haywood Securities said underlying the Asanko mine are defined proven and probable reserves containing 4.8 million ounces of gold, and a global resource base containing 10.4 million:
"An expanded single processing plant could have the potential to deliver ~13 years of production [at] an average annual output of 348,000 ounces of gold at a life-of-mine cash operating cost of ~US$630 per ounce and all-in sustaining cost of ~US$700 per ounce."