Four drill rigs at Roxgold’s TSX: ROXG; US-OTC: ROGFF) Sequela gold project in Cote d’Ivoire continue to return high-grade results at both Ancien and Antenna North, the company reports.
Assay highlights from Ancien, which lies within 6 km of the project’s Antenna deposit, came from drill hole SGRD732, which returned 14 metres grading 13.3 grams gold per tonne from 71 metres, including 4 metres of 24.5 grams and 2 metres of 18.8 grams gold. Drill hole SGDD066 cut 35 metres of 5.5 grams gold from 136 metres, including 3 metres of 23.1 grams gold and 3 metres of 23.4 grams gold.
The results at Ancien, “further underpin the high-grade, high-value contribution potential of the deposit to the mine plan,” CEO John Dorward said in a news release. “I am confident that we will continue to unearth further upside from the existing four deposits, while preliminary testwork on a suite of early-stage targets on the property has demonstrated encouraging results and will be accelerated for drill testing later this year.”
Paul Weedon, Roxgold’s vice-president exploration, added that the drill results from Ancien follow the high-grade results released on June 26, which include 20 metres of 28 grams gold from drill hole SGRD730.
At the Antenna North satellite pit, shallow infill results included 15 metres grading 2.8 grams gold from 15 metres in GRC807; 7 metres of 3 grams gold in drill hole SGRC812, starting from 26 metres downhole; and 5 metres of 7.5 grams gold from 20 metres in drill hole SGRC815.
Apart from the Antenna deposit, Antenna North satellite pit and Ancien deposit, the project contains the Agouti and Boulder deposits. In addition, the company says there are 22 prospective targets on the 363-sq.-km land package.
A preliminary economic assessment (PEA) of Seguela completed in April outlines a mine life of eight years, with annual production of more than 100,000 oz. gold at all-in sustaining costs (AISCs) of US$749 per ounce. In the first three years of production, the PEA envisions an average of 143,000 oz. gold annually at AISCs of US$600 per ounce. Initial capex is pegged at US$142 million, including a US$20 million contingency, and the payback period is estimated to be just over a year.
At a gold price of US$1,450 per oz., the study estimates an after-tax net present value at a 5% discount rate of US$268 million and an internal rate of return of 66%.
The Seguela project has measured and indicated resources of 7.06 million tonnes grading 2.3 grams gold per tonne for 529,000 oz. gold and an additional 5.37 million inferred tonnes averaging 2.9 grams gold per tonne for 508,000 ounces.
Roxgold envisions a conventional open-pit mining operation that will exploit the Antenna deposit along with its satellite deposits (Ancien, Agouti and Boulder).
The company expects to complete a feasibility study in early 2021 and make a construction decision on the project in the first half of next year.
Craig Stanley of Raymond James commented in a research note that Seguela “has the potential to more than double Roxgold’s production in a relatively short timeframe without issuing equity.”
Haywood Securities’ Geordie Mark noted that the latest drill results “capture growth potential and resource conversion de-risk heading into the delivery of the feasibility study in early 2021,” and said that Roxgold is one of his top picks in the junior gold space.
“Overall, we continue to be impressed by the company’s exploration results on Seguela, and in particular at the high-grade Ancien target, which we expect will be a key lever driving front-end project economics as more advanced mine sequencing plans come to light,” he commented in a research note. “Given the backdrop of more recent exploration success demonstrated at various targets across the Seguela camp (i.e. Ancien), we expect Roxgold to be capable of teasing further value from this grassroots opportunity via ongoing drilling, and in turn define a sufficient resource base that supports the company’s transition into a multi-asset producer in the near term (2022).”
Roxgold acquired the Seguela project, 240 km northwest of Yamoussoukro and 480 km northwest of Abidjan, in April 2019 for US$20 million.
In the first half of the year, Roxgold’s Yaramoko complex in Burkina Faso produced 65,192 oz. gold. In early July, the company said Yaramoko was on track to meet its annual production guidance of between 120,000 and 130,000 oz. gold.
Over the past year in Toronto, Roxgold’s shares have traded in a range of 57¢ and $1.64 and at press time were changing hands at $1.61. The company has about 372 million common shares outstanding for a $599-million market capitalization.