ASX-listed Predictive Discovery plans to publish an updated mineral resource estimate (MRE) on the Bankan gold project, in Guinea, by the end of January next year, in time for the Investing in African Mining Indaba, which will be held in Cape Town, from February 6 to 9.
The updated MRE will be followed by the publication of a scoping study by the end of 2023.
The company plans to spend about $47-million on work, which will be funded from its cash on hand, related to the scoping study, including environmental studies.
Predictive MD Andrew Pardey tells Mining Weekly that the project’s current resource lies on the outer buffer zone of the Upper Niger National Park and that environmental studies will need to consider potential impacts on the park in future, should the resource extend to the inner buffer zone.
He also points out that further MRE updates will be made available as the company progresses a 60 000 m diamond and reverse circulation drilling programme on the project, as well as infill and resource conversion drilling.
The Bankan project is located within the Siguiri district in the north-east of Guinea, and forms part of the West African Birimian gold belt, which also hosts Nordgold’s Lefa gold mine, AngloGold Ashanti’s Siguiri gold mine and Hummingbird Resources’ Kouroussa gold mine.
Pardey confirms that the company intends to develop and operate the project itself, and not outsource mining to a contractor or sell the project, hence its appointment of various versed experts in mining on the board and on technical teams.
The company envisions an openpit operation with potential for underground mining later on.
Pardey says the Bankan project, with its 4.2-million-ounce inferred resource as at of November 16, will remain Predictive’s main focus until well into the mine’s operations, before the company will consider acquiring and developing more West Africa-based prospects.
In a recent interview with Stockhead’s Oriel Morrison, stock speculator and massive gold bull Rick Rule said this:
“There are so many factors weighing on things that I have no idea of the direction of the market in the near term.
“I do believe that the USD weakness in gold will end sooner rather than later, within 12 months.”
Gold may not need 12 months. Last week his thesis was validated when a cool US inflation report indicated to markets that the Fed may soon downshift interest rate hikes.
The USD tumbled and gold surged, perhaps helped along by the chaos in crypto.
Just a sniff of a Fed pivot sent gold to the high $US1,700/oz mark. What would an actual loosening on monetary policy do?
“I don’t believe the impact of high interest rates has worked its way through the economy yet,” Rule says.
“I suspect when the pain associated with those interest rate rises works through the US economy, the Fed will likely have to pivot.
“If they pivot, I think that gold in USD terms will surprise people to the upside.”
Rule, along with most experts, is expecting a recession in 2023. Because of that he sees limited upside for base metals stocks in the near term.
“I do allow my timid economic nature to constrain my bullishness around base metals stocks, which I see doing very well five years from now when we hit a supply cliff,” he says.
“Make no mistake, a supply cliff is coming in a lot of commodities, like copper. Absent a recession you could expect copper stocks, as an example, to do extremely well, because of the production shortfall relative to demand.
“But if we have a recession, I expect demand for commodities will fall. And even if commodity prices don’t fall further, they won’t rise the way they otherwise would.”
These are the conditions in which gold can thrive, Rule says.
“If we have a recession next year, it wouldn’t surprise me at all to have fiscal action which brings us back to the 1970s — inflation, with economic stagnation simultaneously,” he says.
“That set of circumstances, if it occurs, would likely be as good for the gold prices as it was in the 1970s.
“If you weren’t around back then, take my word for it – while it was not good for other parts of your portfolio, it was very good for your precious metals portfolio.”
EMR owns the Okvau gold mine in Cambodia, where it is a first mover, with the $120 million mine opened in 2021 considered the first commercial gold mining operation in the Southeast Asian country.
So far it has been a winner, delivering over 100,000oz in its first full year of operation in FY22, including commissioning.
After official commercial production of 88,171oz at US$754/oz in 2022, the September quarter was a reasonably strong start, with 23,217oz produced despite a SAG mill gearbox failure and what the miner called a “99th percentile” wet season.
That saw costs finish slightly above its US$740-810/oz forecast at US$824/oz. Still very good.
The company, which also took majority control of WA gold explorer Bullseye Mining this year, has maintained FY23 forecasts of US$740-810/oz AISC and production of 25-30,000oz per quarter.
“What I really like about the Emerald story is I have done business with the team in various incarnations for a very long time,” Rule says.
“I know them, and I trust them.
“They are very good at acquiring projects where the attributes aren’t understood by other people, building them, and operating them successfully.
“In this case they identified a project in a frontier market of Cambodia. The metrics of the property when they acquired it surprised me in terms of the grade and the stripping ratio, but I was nervous about their ability to build a mine in a remote, frontier surrounding.
“They are now on time, on budget, and well ahead of anticipated capacity.”
Because they are frontier developers, they have an advantage in a highly mineralised part of Cambodia where there is absolutely no competition, Rule says.
“I could see this becoming a camp, or a district,” he says.
Bullseye is also an attractive project, Rule says, although not as attractive as the Cambodian asset.
“But I think it will find favour with the Australian investors; they will get a lift as they begin to demonstrate good news coming out of this second project,” he says.
The Emerald team are serial developers, Rule says. They have built companies with several mines.
“I suspect that the free cashflow, which will exceed $100m next year from Cambodia, will allow them to do that,” he says.
“They will be able to build a 3, 4 or 5 mine company over the next five years.”
Rule says he has owned this former small cap explorer for a “very, very long time”.
In April 2020, the long-time West African prospect generator rocketed from 0.7c to 7c per share – a 900 per cent gain – on its discovery at the Bankan project in Guinea.
The stock now has a 4.2Moz resource in the bag following a recent resource update. An extensive drilling program is ongoing, with 10 drill rigs in operation.
“This 4Moz discovery [is] by all indications going to grow,” Rule says.
“But this company suffers in equity markets because of Australian investors’ preference for Australian projects. So it falls through the cracks a little bit.
“A discovery of this scale, one that could become a tier 1 discovery, relative to its market cap appears attractive to me.
“It’s been attractive to me for enough time that I have a full allocation. If I didn’t have a full position, I would be on the bid.”
Predictive Discovery Ltd (ASX:PDI) continues to intersect broad, high-grade gold from resource definition drilling at its 4.2-million-ounce Bankan Gold Project in Guinea, raising the probability of lifting the current resource estimate.
A total of 1,266 holes for 42,877 metres have been drilled between April to the end of August 2022 in near-mine aircore and power auger drilling, and from August 1 to mid-September 2022 in infill diamond drill and reverse circulation (RC) drilling.
New deeper DD results 200 metres below the current NE Bankan pit shell showed further continuity of gold mineralisation and grade outside the current 3.9-million-ounce resource.
The aircore and auger drilling results, all within 3 kilometres of the current NE Bankan and Bankan Creek discoveries, have provided additional shallow and near-term deposit targets that have potential to add additional resource ounces to the Bankan Gold Project.
Predictive managing director Andrew Pardey said: “The drill results reported today are a combination of targeting the high-grade zone beneath the NE Bankan optimised resource pit shell, combined with the RC grade control drilling program adding to and improving the quality of Bankan’s 4.20million-ounce inferred resource. Also included is aircore and auger drilling, targeting potential nearby ‘feeder’ deposits.
“The company’s understanding of Bankan’s rich geology has accelerated substantially with 10 active drill rigs on site, up from four at the beginning of the year.
“Results to date correlate with our geological model of the orebodies discovered to date, whether it be the shallow oxide or the high-grade zone extending well below the current NE Bankan optimised resource pit shell.
“We remain on track to deliver on the 60,000-metre RC and diamond campaigns and have commenced the work on the detailed scoping study due to be completed in the second half of 2023.”
Drilling at NE Bankan is targeting the plunge extension of the high-grade shoot and upgrading the resource classification to indicated. The Bankan Project currently has an inferred resource of 79.5 million tonnes at 1.63 g/t gold for 4.2 million ounces.
There are currently 10 active drill rigs on site with four diamond, two multi-purpose diamond/RC, one RC, one aircore and two power auger drill rigs, all conducting various resource development and exploration programs across the Bankan Project.
Better results from six DD-holes totalling 3,022 metres include:
Additional drilling has been planned up-dip and south along strike to follow up on the strong intercept.
RC drilling completed 77 holes for 6,181 metres to investigate the short-range variability of the high-grade mineralisation within the upper fresh and oxide horizons of the main shoot.
Results from this program will be used to determine the drill spacing required to convert the current inferred resource to the indicated category and provide input into the scoping study now underway.
Some of the better results include:
A total of 109 shallow aircore holes for 5,312 metres returned several significant intercepts, namely 50 metres at 0.58 g/t, 12 metres at 1.24 g/t and 14 metres at 0.96 g/t. The results confirm the presence of the NE Bankan-style mineralisation on exactly the same structural setting within the tonalite.
Some 1,074 auger holes totalling 28,362 metres were drilled on the main prospects between the NE Bankan and Bankan Creek resources areas.
Infill drilling around the eastern footwall of the NE Bankan shear zone picked up gold anomalism along the main Mafic Basalt-Tonalite contact east of the current pit shell with 10 metres at 10.53 g/t and 6 metres at 1.3 g/t, indicating mineralisation is potentially on the contact heading southwest along the interpreted strike extension.
A new NE Bankan program for DD and RC drilling will be designed to deliver a high conversion of resources from inferred to indicated categories.
Six DD rigs remain on double shift, while a second EDM2000 deep hole rig is expected to arrive in the fourth quarter of 2022. The final 3,916 metres of the NE Bankan resource RC drilling program are expected to be completed in October.
Over at Bankan Creek, some 1,280 metres of RC drilling is expected to be completed in the first quarter of next year.
Work on the regional as well as the near-mine exploration program will also keep Predictive very preoccupied. The latter will include testing the near-resource surface prospects and infill aircore sections linking NE Bankan North southward to join with the NE Bankan northern pit mineralisation.
Andrew Pardey, Managing Director, comments:
“These excellent results from our infill and grade control drilling program at NE Bankan further underpin the consistency and extent of this extraordinary orebody. These results are from within the optimised resource pit shell and are aimed at providing further certainty of the tonnes and grade ahead of ultimately building and mining the NE Bankan deposit. Encouragingly, we continue to see strong continuity in the high-grade plunging shoot in the middle to lower parts of the optimised pit shell.
“Completion of the RC grade control program has generated valuable information for future drilling and resource modelling purposes, including a target spacing of 80 m x 40 m to achieve the indicated category.
“Drilling is continuing to target resource extension and infill drilling, including in the area down-plunge of the initial underground resource where a number of deeper holes returned high-grade intercepts. With eight drill rigs currently operating on site, we are well placed to update the mineral resource estimate during the first quarter of 2023, including a partial upgrade to Indicated and an extension of the initial high-grade underground mineral resource.”