Adamus' "South Ashanti" in Ghana
Date: May 19, 2006
Adamus Resources Should Complete Feasibility Study On South Ashanti Gold Project By End Of Year.
When our Man in Oz wrote about Adamus Resources last September he was trying to pin down whether the company was going to go on drilling and increasing the resources on its South Ashanti gold project or get into production. The company has its main listing in Australia and a secondary listing in Canada which is explained by the fact that Australian investors proved lukewarm to a company with its assets in Ghana despite the fact that it is mining friendly and hosts a number of major gold mines. The proportion of North American investors built up quickly to around 40 per cent, confirming the wise decision to operate in Ghana, but the nagging doubt remained as Canadians have a tendency to drill deposits to the consistency of cheese before starting development.
Since then the doubts have rolled away as Australians have embraced Adamus at last as evidenced by the A$13 million raised by Euroz Securities to fund the current feasibility study and accelerate exploration drilling at its Southern Ashanti gold project.The decision to raise further funding and commence the feasibility study followed very positive results from a scoping study into the economics of developing the project announced in February. The gold resource is currently estimated at 22 million tonnes grading 2.1 g/t gold to give 1.5 million ozs, but Hamish Halliday, the managing director of Adamus, wants more and has committed to a further 25,000 metres of drilling.
This increased resource estimate resulted from drilling on the main Salman trend, particularly at the Akanko prospect where reconnaissance drilling has already intersected 20 metres at 8.99 g/t gold from 26 metres depth, and from parallel zones as well as from deeper mineralization at the Anwia deposit. There is a strong case for rolling in more ounces as the scoping study projected net free cash flow of around A$186 million at a gold price of US$625/oz.
Hamish Halliday describes the recent acquisition of Anwia South as a sweetener to the Southern Ashanti gold project. Well they don’t come much sweeter than that as the company announced earlier this month that a diamond drilling programme has started at the Atom prospect which is only 3 kms south of the Anwia deposit. This drilling will target high grade mineralization as it contains RC drill intersections up to 6 metres at a grade of 148 g/t gold. There seems little doubt that Anwia South will add significant resource ounces to the Southern Ashanti project and drilling will focus on the main lode over a strike length of 250 metres and to a depth of 65 metres.
Halliday has also contracted two additional RC rigs and the first of these will carry out infill drilling on the Salman trend as part of the feasibility study. The second rig, which does not arrive until June will carry out exploration work at Salman and Anwia. When Minews spoke to him today he suggested that 2006 could be the year for Adamus. It certainly looks like that as the feasibility study on the South Ashanti project should be complete by the end of December. Two firms of engineers have just been appointed to report on the metallurgy, tailings and plant infrastructure, so things are rolling along. Like CBH Resources the company has also made a couple of crucial appointments of people experienced in geology and plant development in this part of Africa, which is always a good sign.
The acquisition of Anwia South also enables Adamus to explore over a whole new regional area which must add further to the value of the company. African Lion 2, an Australian based fund which is an offshoot of Lion Selection, certainly thinks so as it has just invested A$2.7 million though a private placement. Pity the Aussies didn’t cotton on to Adamus earlier as it would saved it having to go for the dual listing in Canada with all the additional expense that this involves.
Companies featured in this Story:
Adamus Resources Ltd (ASX - ADU)
CBH Resources Ltd (ASX-CBH)
Copyright ©2003 MINESITE
