Newcore Gold has started drill-testing deeper, high-grade targets at the Enchi project in Ghana. (Credit: Newcore Gold)
Newcore Gold (TSXV: NCAU) said drilling at its Enchi gold project in southwestern Ghana encountered multiple wide zones of higher-grade gold mineralization. Shares rose.
Hole KBRC357 in the north-central portion of the Boin gold deposit intersected 4.41 grams per tonne gold over 24 metres from 126 metres downhole, including a higher-grade interval of 10 metres at 9.08 grams gold from 132 metres depth, Newcore said Tuesday in a statement.
All 11 holes whose results were disclosed in Tuesday’s statement revealed gold mineralization. Hole KBRC360 intersected 52 metres at 1.58 grams gold from 75 metres downhole, including a higher-grade interval of 16 metres grading 3.04 grams gold from 96 metres downhole, Newcore said.
Drilling “continued to deliver high-grade hits at depth and below the mineral resource estimate pits,” SCP Resource Finance mining analyst Justin Chan said Tuesday in a note. “We see Enchi as a compelling candidate among the next generation of West African development projects, in an attractive jurisdiction (Ghana) with profitable ounces and geological upside at depth.”
Newcore’s 35,000-metre drill program at Enchi, which targets near-surface oxide and shallow sulphide mineralization, aims to convert inferred resources to indicated before a pre-feasibility study is commissioned later this year. Recent drilling was carried out in areas where the previous pit constrained mineral resource estimate was classified as inferred, the company said.
“The results from the drill program underway at Enchi continue to highlight the strong continuity of mineralization as well as the potential for resource growth,” CEO Luke Alexander said. “With most drilling to date at Enchi only completed to an average vertical depth of 100 metres, we believe we have only just begun to define the potential of the project.”
Five deposits
Newcore shares rose 6.6% to C$0.65 apiece Tuesday morning on the Toronto Stock Exchange, giving the company a market capitalization of C$163 million. The stock has traded between C$0.265 and C$0.67 during the past 12 months.
Enchi, located near the namesake town, is about 400 km west of the capital Accra, and just east of the border with Côte d’Ivoire.
Newcore’s 248-sq.-km land package covers 40 km of the Bibiani shear zone. The gold belt hosts several multi-million-ounce gold deposits, including Kinross Gold’s (TSX: K; NYSE: KGC) Chirano mine 50 km north and Asante Gold’s (CSE: ASE) Bibiani mine to the northeast.
Boin is among the five deposits that make up Enchi, which hosts 41.7 million indicated tonnes grading 0.55 gram gold for 743,500 contained ounces. Its inferred resource totals 46.6 million tonnes at 0.65 gram gold for 972,000 ounces.
An updated preliminary economic assessment (PEA) last April gave Enchi a net present value of $371 million and an internal rate of return of 58% at a gold price of $1,850 per ounce. Initial capital costs were pegged at $106 million. The PEA outlined a nine-year, 8.1 million-tonne-per-year open-pit, heap-leach mine. The all-in sustaining costs are forecast at $1,018 per ounce.
