Roxgold tables initial resource at Yaramoko

Roxgold (ROG-V) is advancing its Yaramoko gold project in Burkina Faso, West Africa, despite lingering questions stemming from an unresolved proxy battle with a group of prominent shareholders.

The company released an exploration update and inaugural gold resource on Aug. 7 that highlights Yaramoko’s high gold grades, though the rushed nature of the resource drilling limited the tonnage that could be delineated.

The 55 zone hosts 617,000 indicated tonnes grading 17.8 grams per tonne for 354,000 contained oz. gold, as well as 1.2 million inferred tonnes averaging 7.7 grams for 306,000 contained oz. gold.

Roxgold focused its delineation work on Yaramoko’s 55 zone — a high-grade target discovered in 2011 — in order to fast-track a resource estimate calculation and establish the deposit’s early stage economic potential.

The company includes 128 holes over 32,000 metres in its maiden resource estimate, having completed the work only nine months following the 55 zone’s discovery. 

“The receipt of this high-grade gold resource estimate marks a turning point for Roxgold,” president and CEO Robert Sibthorpe states. “It validates the strong financial support provided by our shareholders over the past year. This support has enabled us to rapidly establish the initial resource estimate. Roxgold can now move forward with plans to acquire the personnel and assets appropriate for an advanced exploration company approaching the development stage.”

According to lead director Allan Fabbro, the company is particularly pleased with the ratio of indicated to inferred resources, as well as the fact that the bulk of the resource estimate is located within 250 metres of surface, and remains open at depth.
“The exploration teams in Canada and Burkina Faso deserve recognition,” Fabbro comments. “Both for the discovery of the 55 zone in early 2011, and the three efficient drill campaigns which delineated the resource received today. Their work will allow us to go forward with a promising asset and a strong treasury.”

Drilling to date has established an east–west strike of 800 metres at the 55 zone, which has also been extended to depths up to 250 metres without significant loss in gold grade or true widths.

Roxgold is running six drills at Yaramoko in a bid to expand the existing resource in anticipation of an upcoming economic assessment. The company expects to complete 30 more holes at the 55 zone over the next two months.

In addition to exploring the 55 zone, Roxgold has completed 4,000 metres of reverse-circulation drilling at its 109 zone and 117 zone, and expects assays on the program in the next few months.

Work is also ongoing at the Bagassi South target — which lies 3 km south of the 55 zone — with 375 soil samples and 4,000 metres of drilling underway in 2012.

Roxgold’s shares have lost 71% of their value, or $1.55 per share, since the company’s last major exploration update on April 20.

However, Roxgold is in a good  cash position with US$27 million on-hand as of July 16, and a fully diluted position theoretically valued at US$48 million.

The company’s inaugural resource estimate at Yaramoko did little to sooth investor sentiment, as shares dropped an additional 17%, or 9¢, en route to a 45¢ presstime close.

Dissident investors led by Oliver Lennox-King have criticized Roxgold management for not handling the development of their West African gold asset package in a way that best serves the interests of shareholders, and this latest resource estimate does not look to have assuaged their concerns.