AFRICA — Golden Knight sees bright future for projects in West Africa — Development at Tarkwa nearly complete

Although its work in the Night Hawk Lake area of Ontario has attracted more attention of late, Golden Knight Resources (GKR-T) holds an impressive portfolio of gold properties in far-off Burkina Faso and Ghana.

The Vancouver-based company’s current land package covers 1,500 sq. km over 13 properties. Many of these projects are in the early stages of exploration, though a resource has been calculated for one of the properties.

The crown jewel of the company’s African properties is the soon-to-be producing Tarkwa open-pit gold project in southern Ghana. The company owns a 17.5%-equity interest in the property’s owner. The remaining interest is divided among the operator, Gold Fields of South Africa (70%), the Ghanaian government (10%), and the Social Security and Natural Insurance Trust of Ghana (2.5%).

Prestripping continues, with the first ore expected to be stacked at month-end. Pouring of the fist dor bar will following in late March or early April.

By 2000, the project is expected to have a production rate of 250,000 oz.

gold per year. That figure is expected to double over the ensuing four years.

Cash costs in the first five years of production are anticipated at US$210 per oz.

Initial production will come from three of the project’s five deposits, which, together, host in situ reserves of 286.6 million tonnes grading 1.39 grams gold per tonne. Stripping ratios during the first five years of production are expected to average 2.25-to-1.

Additional reserves are known, but are uneconomic at current gold prices.

However, the project provides Golden Knight with sufficient leverage for development of its own projects.

“Our [equity] interest in Tarkwa gives us a solid asset,” says Robert Quartermain, president of Golden Knight. “And although it will be some time before any cash flows back to Golden Knight, it’s an asset that will grow in value and, accordingly, so will our investment.”

Gold mineralization is hosted by Tarkwainan clastic sediments overlying Upper Birimian marine sediments and clastic volcanics. The gold is contained in multiple reefs of quartz-pebble conglomerates and arkosic sandstones, which can vary in thickness from 1 to 10 metres. Low-grade quartzite zones separate the reefs and range in thickness from 2 to 20 metres.

Excluding Tarkwa, Golden Knight has 10 exploration properties in Ghana, with interests varying from 50% to 90%. The company is paying particular attention to five closely spaced concessions lying 50 km north of Tarkwa.

The properties are part of the Manso Nkwanta joint venture, an equal partnership between Golden Knight and Leo Shield of Australia. Golden Knight operates the project.

At Oda River, a first phase of reverse circulation drilling began in early 1996. By the end of that year, the company had drilled 205 holes, outlining a 2.2-km long zone which was dubbed Abore North.

Gold mineralization is associated with stockworks in highly altered granites intruded along a contact of andesite and phyllite. The mineralization was traced to depths of 100 metres below surface and across widths of up to 40 metres.

In early 1997, resources at Abore North were estimated at 15 million tonnes grading 1.24 grams. The calculation was based on 16,800 metres of drilling and a cutoff grade of 0.5 gram.

Infill drilling has since confirmed the continuity of mineralization along strike.

As well, preliminary metallurgical tests on coarse and fine material indicates a high recovery rate for gold. Using heap-leaching, between 80% and 90% of the gold was liberated from coarse material, whereas recovery rates from finer material, which was subjected to gravity separation and cyanidation, topped 90%. The tests also concluded that the introduction of a grinding circuit for deeper, unoxidized gold-bearing granite and phyllite would be beneficial.

Drilling at the Mpesetia concession, to the north, has also borne fruit.

Three parallel bodies in a 4.4-km-long zone of shearing have been tested by 115 reverse circulation holes over 6,518 metres. Highlights from the most recently drilled holes included 10 metres of 8.2 grams and 34 metres of 2.74 grams.

Current work by the joint venture is focused on identifying drill targets through geochemical sampling and trenching. Most of this work is at Oda River, and Golden Knight has not ruled out the possibility of discovering a deposit similar to Abore North there.

“We’ve delineated that [Abore North] deposit as far as we can and, in terms of an open-pit deposit, we’ve taken it as deep as we think current gold prices will warrant,” says Kenneth McNaughton, Golden Knight’s project development manager.

Like the exploration of Oda River, work at the wholly-owned Seguenega property in Burkina Faso is aimed at finding targets with potential similar to those drilled in previous years. Over the next six months, work there will involve regional surveying of a 40-to-60-sq.-km portion of the southwest corner of the property, along with a structural mapping.

“We want to develop the ability to identify the best structural setting for the gold,” says McNaughton.

Work will also continue in the Gambo area, which is situated in the southwestern portion of the property. There, 38 holes drilled last year identified two significant zones of mineralization. The zones, Gambo I and II, are coincident with induced-polarization anomalies.

The first hole drilled at Gambo I returned separate intervals of 11 metres (from 1 to 12 metres) grading 1.2 grams and 7 metres (from 36 to 43 metres) grading 5.2 grams. Hole 2, which was collared 200 metres north of hole 1, intersected 5 metres (from 54 to 59 metres) of 5 grams. Further downhole, a 10-metre interval (from 70 to 80 metres) averaged 1.4 grams. Results from four holes are still pending.

At the Gambo II zone, which lies 500 metres west of Gambo I, 14 holes identified two high-grade subzones with a combined strike length of 500 metres. The zones are separated by 700 metres of anomalous mineralization.

Selected drill results include: 66 metres (from 5 to 71 metres) of 1.7 grams in hole 1; 57 metres (from 6 to 63 metres) of 2.4 grams in hole 2; 22 metres (from 14 to 36 metres) of 1.7 grams in hole 3; 4 metres (from 2 to 6 metres) of 5.6 grams and 20 metres (from 36 to 56 metres) of 4.6 grams in hole 8; and 4 metres (from 41 to 45 metres) of 3.6 grams in hole 7.

Geologically, the Gambo structures occur in an alternating sequence of sheared metamorphosed volcanic and sedimentary rocks of the Birimian system.

Gold mineralization is associated with sheeted and massive quartz veining, and occurs primarily in free form. The structure hosting the Gambo II zone is further complicated by pre- and post-mineralization folding, which caused pinching and swelling.

Though drilling continues, the number of holes being sunk is limited.

“The current price of gold makes it pretty tough to warrant a large drilling campaign [on the Gambo I and II zones],” says McNaughton.

That sentiment is echoed by Quartermain, who says expenditures will be restricted to those projects which show potential for immediate results.

“Grass-roots situations are certainly going to be reduced,” he says.

“Projects such as Seguenega will be modified so that we get the best value for our exploration dollars.”

In 1997, the company spent US$3.1 million on exploration programs in Ghana, and another US$1 million in Burkina Faso.