VANCOUVER — With promising drill results and money in the bank, True Gold Mining (TSXV: TGM; US-OTC: RVREF) keeps adding to the drill program at its Karma project in Burkina Faso.
The 850 sq. km Karma project hosts five deposits — Kao, Goulagou I, Goulagou II, Rambo and Nami — that all contain near-surface oxide gold mineralization. True Gold is studying the feasibility of mining the deposits using a central processing facility, with the study due out before year-end.
While advancing the feasibility study, True Gold is probing for more mineralization at Karma, and it’s been getting good results. In two weeks True Gold announced drill results from three targets at Karma — all of which returned gold.
The first announcement came from Kao, where a reverse-circulation (RC) drill program testing ground to the north has doubled the strike length. The 900-metre wide deposit was previously constrained to a 1,400-metre strike length, but True Gold’s drills have encountered consistent mineralization along 2,800 metres of strike.
Some of the best results include 1.08 grams gold per tonne over 50 metres, 1.56 grams gold over 26 metres and 0.75 gram gold over 30 metres. The company previously hadn’t tested the area north of Kao because windblown sands masked any gold in the geochemical response. Recent induced polarization and magnetic anomalies drew the company back to the area.
True Gold completed over 10,000 metres of drilling north of Kao in the first half of the year, testing for gold along north and west- to northwest-trending structural corridors. Holes were drilled to an average depth of 150 metres. Assay results for the final 19 holes are pending, and True Gold just approved another 9,000-metre drill program that should be complete by September.
The second set of results came from Rambo West, a target area 200 metres northwest of the Rambo deposit. Earlier this year an RC program at Rambo West returned promising results, including 1.39 grams gold over 28 metres. In June, True Gold followed up with six diamond drill holes over an area measuring 160 by 125 metres, and all six hit into near-surface oxide gold mineralization.
Results include 1.18 gram gold over 25.5 metres, 1.31 grams gold over 6 metres and 1.15 grams gold over 15 metres.
Rambo bears the highest grades of the deposits at Karma to date: its inferred resource stands at 818,578 tonnes grading 2.514 grams gold. True Gold has suggested that Rambo might be the first deposit put into production at a Karma gold mine because of its higher average grade. The company will be heading back to the area to complete a 2,700-metre diamond drilling program that will test for mineralization between Rambo and Rambo West.
The third and most recent set of results came from a different area. Watimona is a target area at the north end of the Karma land package, almost 30 km north of the Goulagou deposits. Following positive results from a rotary air blast drill program in 2012 and a short RC program in the second quarter, True Gold sent a diamond drill to Watinoma and completed nine holes.
Two of those holes twinned earlier RC holes and produced similar results, including 1.91 grams gold over 70.5 metres. Of the other seven holes, four intersected gold. Results include 1.92 grams gold over 11.1 metres, 3.27 grams gold over 8 metres and 1.05 grams gold over 20 metres.
True Gold has cash to keep its drills turning after closing two funding deals in recent months. In May, Teck Resources (TSX: TCK.B; NYSE: TCK) bought 30.3 million True Gold shares at 33¢ apiece, which added $10 million to True Gold’s coffers. In June, Liberty Metals & Mining Holdings spent $17.4 million on 52.8 million True Gold shares and bought a 2% net smelter return royalty on Karma, for just over $6 million.
Each deal added 25% to True Gold’s share price, lifting it to the 33¢ range. But both times the price slid back down within a few weeks.
The pattern continued after the company’s recent positive drilling news, with shares once again gaining 25% to reach 35¢. Last September the company’s shares were worth more than 70¢.
True Gold has 264 million shares outstanding.