VANCOUVER — Golden drill results from a satellite zone that could provide higher-grade feed for the Edikan gold mine in Ghana have given owner Perseus Mining (TSX: PRU; ASX: PRU; US-OTC: PMNXF) a nice share-price boost.
Perth, Australia-based Perseus has been producing gold at Edikan since August 2011. This year the company cut back on exploration to conserve cash, but drills are still testing targets for high-grade mineralization to enhance the mine’s average headgrade.
Bokitsi South is the first such target tested this year, and results from the first 15 of 37 holes suggest that it could offer what Perseus seeks.
Some of the better assays from the latest results include 13 metres of 5.7 grams gold per tonne, 11 metres of 4.4 grams gold, 15 metres of 4.2 grams gold, 3 metres of 8.6 grams gold, 11 metres of 7.4 grams gold, 10 metres of 6.7 grams gold and 20 metres of 8.6 grams gold.
“The infill drill results achieved at Bokitsi South are encouraging in our quest to delineate high-grade mineralization to enhance the grade of mill feed at our Edikan gold mine,” Perseus managing director Jeffrey Quartermaine said. “The fact that the mineralization is located within 5 km of our processing plant at Edikan is a bonus.”
Bokitsi offers sediment-hosted gold in a shear zone that extends south along the western flank of the Fetish deposit. Fetish is a granite-hosted deposit, like those being mined at Edikan. These deposits are wide and consistent, but carry lower gold grades. By contrast, the area’s sediment-hosted zones are narrower and higher grade.
Perseus has delineated two such sediment-hosted deposits — Bokitsi North and South — along a kilometre of strike. Earlier operators mined the upper oxide layer from both sites in the nineties, but left the sulphide mineralization in the ground.
Metallurgical test work shows that the Edikan processing circuit would recover most of the gold from Bokitsi mineralization.
Perseus plans to calculate an initial resource estimate for Bokitsi South before year-end.
Perseus has had its share of challenges at Edikan this year, which includes a large debt owed to Perseus by the government of Ghana.
The debt developed through Ghana’s system for collecting value-added tax (VAT), which had Perseus overpay significantly. The government acknowledged the account receivable, but it has taken time for the parties to agree on a repayment schedule. On June 11 Perseus received the first of three agreed-upon payments that should repay US$15.8 million of the US$32.7 million it is owed. Perseus says it is working with the government “to agree to a schedule for repayment of the balance of the outstanding debt and to avoid a repeat of the current situation, where a large VAT receivable accumulates and remains unpaid for an extended period.”
The availability of grid power has been another challenge for Perseus. Ghana is short on power and the country’s electrical infrastructure is insufficient, which means brownouts and blackouts are common.
“When it comes to repayment of VAT and the availability of grid power, they are outside of our control, but they certainly do take the gloss off what would otherwise be a creditable performance at the Edikan gold mine by our hardworking team of employees and contractors,” Quartermaine said.
Adding to the structural problems, a fire at Edikan shut the process plant down for seven days.
Despite the troubles, Perseus produced 43,787 oz. gold at Edikan in the second quarter, at an all-in cost of US$1,286 per oz.
At the end of March Perseus had $47.6 million cash-on-hand. A good chunk of those funds came from a February financing that saw Perseus sell 68.7 million shares to raise $32 million.
On news of the Bokitsi drill results, Perseus’ share price jumped 9.5¢ to 42¢. Perseus has a 52-week share price range of 20.5¢ to 81¢, and 527 million shares outstanding.
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