True Gold Mining’s (TGM-V) Karma project in Burkina Faso keeps getting better and better.
The latest news from the ground is that the company’s drills hit a wide zone of near-surface gold mineralization next to a known deposit on the property.
The intercept came out of the Rambo West target, where three of four reverse-circulation holes hit mineralization within 18 metres of the surface.
Highlight intercepts include: 1.39 grams gold over 28 metres; 1.02 grams gold over 32 metres; and 1.02 grams gold over 24 metres, from three separate holes.
Rambo West occurs 300 metres along strike west of the Rambo deposit, and it’s the third exploration target drilled this year with promising results.
Earlier this year the company hit mineralization at the North Kao and Watinoma zones, with the latter returning a 110-metre assay with an average grade of 1.07 grams gold.
With the steady flow of positive results, True Gold is in a good position to add more near-surface oxide gold to its resources.
Mineralization will be within trucking distance of a proposed heap-leach processing facility at Karma.
The Karma project hosts five known deposits. Rambo is the smallest but the highest grade of the bunch, with indicated resources of 818,578 tonnes grading 2.51 grams gold for 66,156 oz. gold.
The deposit is 400 metres long by 320 metres wide, and up to 112 metres deep. It is open along strike to the west and downdip.
True Gold completed a preliminary economic assessment on the project last September, when it was under the Riverstone Resources banner.
That study estimated a $271-million pre-tax net present value using a 5% discount rate and an average gold price of US$1,350 per oz.
The study estimated it would cost $125 million to build a mine with a 10-year lifespan, cash operating costs of US$525 per oz. and 728,000 recovered oz. gold.
Rambo West is located in the Karma project’s main structural corridor, which extends 7.5 km west from Rambo through Rambo West and onto the Goulagou II and Goulagou I deposits.
The geological setting at Rambo West is similar to that of Rambo, with mineralization hosted in a sedimentary sequence near a south-dipping granodiorite footwall contact.
With solid results from the satellite zone, True Gold will use continuity drilling at the known mineralization while testing for links between Rambo West and the main Rambo pit.
And with a $3-million exploration budget for Karma this year, the company could generate more news flow than many of its cash-strapped peers on the junior circuit.
The work the company has done so far has already caught the attention of Haywood Securities analyst Tara Hassan.
Hassan has a “buy” rating on True Gold’s stock and says that the latest results from Rambo West will help future resource additions.
“Karma has evolved considerably in the past twelve to eighteen months as a result of both exploration success and a fresh look at its development approach, which now proposes a heap-leach operation that could be developed for limited capital costs in a short construction period,” she writes in her report.