Exploration heats up again in Mali

Gold prices are back up and explorers are back to work, and it need be no surprise that southwestern Mali, with three gold producers pouring plenty of low-cost ounces, has returned to favour among junior companies as an exploration destination.

The producers never left, of course; AngloGold (AU-N) and Iamgold (IMG-T) at Sadiola and Yatela, and AngloGold and Randgold Resources (GOLD-Q) at Morila. And both Randgold and the Iamgold-AngloGold joint venture have active “district” exploration programs in the mine areas.

But another junior never left either: Nevsun Resources (NSU-T), which had hold of a large gold resource at the Tabakoto property, about 100 km southeast of Sadiola. Over the lean years of junior exploration, Nevsun took the project from the drilling stage to where it is now ready for a feasibility study.

On the way, it picked up the adjacent Segala concession from Semafo (SMF-T), which was busy with its own Kiniero project in Guinea. Semafo got US$1 million in cash, US$2 million in Nevsun shares, and will get a further US$3 million cash and US$3 million in shares over the next two and a half years.

Tabakoto hosts a resource of 8.1 million tonnes grading 5.1 grams gold per tonne, at a 2-gram cutoff grade. Another 2.5 million tonnes grading 5.8 grams is inferred. Segala’s resource, in all categories, is 4.2 million tonnes at an average of 5.4 grams per tonne.

The feasibility study, which took only the Tabakoto resource into account, estimated a capital cost of US$25 million to bring a 105,000-oz.-per-year mine into production. Metallurgical recoveries were 94%, and the study put cash operating costs at US$187 per oz.

Randgold, too, is at the feasibility stage on a project in the western extreme of Mali. The Loulo deposit, with a reserve of 12.1 million tonnes grading 3.7 grams gold per tonne, is being reviewed for production, and some infill drilling and metallurgical testing is being done. The project would be developed as two open pits: Loulo-0 and Yalea. Scoping studies are under way for underground resources beneath both pits.

At the Bourdala concession, about 50 km southeast of Sadiola, Great Quest Metals (GQ-V) has finished a 7-hole drill program to test targets beneath orpailleur workings. At the TD zone, an area of exposed quartz veins with some gold mineralization at surface, three drill holes cut multiple 1-to-7-metre-long intersections with gold grades typically in the 2-gram range. Interestingly, two of the highest-grade intersections were among the longest, with a 7-metre interval running 4.2 grams and a 4.3-metre interval grading 4.3 grams per tonne.

A drill hole on the second zone, Nanike Sodjigui, returned 5.6 metres grading 2.3 grams gold per tonne, while another hole drilled a little to the southwest did not intersect any mineralization. A hole drilled beneath an open pit 1.5 metres north of the Nanike Sodjigui zone intersected some low gold grades but may have been drilled downdip.

The highest grades came out of the Damba Massa zone, about 2.4 km southwest of the TD. There, a single hole drilled below some orpailleur workings cut three separate zones of gold mineralization — one, 24 metres wide and grading 2 grams gold per tonne; a second, 10 metres averaging 3.9 grams; and a third, 5 metres averaging 8.6 grams. The last two intersections carried some higher-grade intervals.

More drilling is planned in the next field season, including testing on the 1.6-km-long Sabakonkon showing, an area of orpailleur workings in tourmaline sandstone host rocks.

Another project at the grassroots level is Diangounte, about 30 km southwest of Sadiola. But here, operator Robex Resources (RBX-V) plans to put the laterite- and saprolite-hosted La Corne gold deposit into production. A prefeasibility study outlined an indicated resource of 1.8 million cubic metres of material grading 3.2 grams gold per cubic metre, part of a total resource of 5 million cubic metres averaging 5.6 grams gold per cubic metre, most of which is in the inferred category. The study concluded that production of 30,000 oz. per year could have a cash cost of US$66 per oz. Capital costs were estimated at US$6 million, with extraction using gravity concentrators. Robex has raised $160,000 for follow-up work on the prefeasibility study.

North Atlantic Nickel (YNN-V) has started work on two concessions: Kantela, which adjoins Sadiola, and Diokeba, which is centred 25 km southeast of Sadiola and ties on to Kantela.

At Kantela, three surface prospects are known. The first is an area of orpailleur activity that coincides with a zone of gold concentrations in soils as high as 0.66 gram per tonne. North Atlantic plans to carry out trenching in that area. The second, a 1,000-by-250-metre soil anomaly with a peak gold value of 0.9 gram per tonne, has seen one rotary air blast (RAB) drill hole, which cut 28 metres grading 1.1 grams gold per tonne.

The third zone at Kantela centres on an outcrop showing where quartz vein material in an argillite host rock returned gold grades of 40-50 grams per tonne. This showing, also, has had a RAB hole poked in it, where a 20-metre length graded 6 grams per tonne. North Atlantic will be trenching there as well.

On the Diokeba property, North Atlantic has performed a soil-geochemical survey on a 200-by-100-metre grid, filling in an earlier reconnaissance-level soil survey on a 1,000-by-250-metre grid. North Atlantic’s survey indicated a soil anomaly defined by a threshold concentration of 16 parts per billion (0.016 gram per tonne), with peak values of 1,017 parts per billion in the north and 830 ppb in the south. Anomaly A, in the north, is about 4 km by 1 km; the southern Anomaly B is a cluster about 2.6 km by 1.5 km.

Pitting and more detailed soil sampling are planned for both geochemical targets.

North Atlantic also has properties in the southern part of Mali’s Birimian shield, an area that is seeing considerable work. At one property, Sinzeni, 50 km south of Morila, a southwest-trending magnetic anomaly has been interpreted as being a splay from the regional shear zone that hosts Morila.

North Atlantic’s second property, Dalakan, is 250 km south of Bamako and 25 km southeast of the Kalana gold mine, which produced about 16,000 oz. gold annually between 1984 and 1991. There, North Atlantic tightened up the coverage of previous reconnaissance-scale soil geochemistry, outlining two zones of anomalous gold concentration.

Kalana itself is due to resume production under the management of British-based private company Avnel Gold, which paid US$2 million for the former Ashanti Goldfields (ASL-N) property.

Afcan Mining (AFK-V), which holds the Kalako permit 3 km east of Kalana, has signed up Ashanti as a partner for early-stage exploration. Ashanti can earn a 60% interest by spending US$350,000 by January 2006; it can increase this to 70% by spending a further US$650,000, and to 85% by providing a bankable feasibility study. The initial stages are painless for Ashanti, which need only spend US$15,000 by July to maintain its option.

Another dormant producer, Kodieran, near the border with Guinea and about 100 km northeast of Ashanti’s Siguiri gold mine, has been dealt to Montreal-based Arca Explorations (ACX.T-V) in a reverse-takeover deal. Details have not yet been announced, but the reverse-takeover will require approval from Arca shareholders.

Not far away from Kodieran, AfriOre (AFO-T) has arranged an earn-in on the Banankoro gold project, about 100 km southwest of Bamako. The company can earn 60% of the interest now held by French-owned New Gold Mali in the concession, with the government retaining its right to take up a 10% carried and 10% working interest.

Afri-Ore’s earn-in requires it to spend US$2.5 million on the property, or provide a bankable feasibility study, by September 2006.

Banankoro is another centre of orpailleur activi
ty, where New Gold Mali has drilled off a 700-metre-long mineralized zone to a depth of 120 metres.

Farther to the east, Randgold Resources is still looking for a buyer for its share of the Syama gold mine, which was shut down in 2001. But 30 km to the north, Afcan has been granted a permit called Loubougoulou, formerly held by Moroccan mining company Managem. Afcan will be mapping and sampling on the property, and performing geophysical and geochemical surveys; the permit is good for nine months.

Etruscan Resources (EET-T) finished induced-polarization surveys on the Finkolo permit area, 15 km southwest of Syama, in December. The survey located three chargeable zones, each between 1.2 and 1.4 km long, coincident with gold in soil samples.

Finkolo, part of the original Syama exploration concession, was drilled by BHP in the 1990s, and some mineralization is known to exist in high-grade veins and in pyritic disseminations in mafic volcanic rocks, a geological setting not too unlike that found at at Syama.