Newcore is operating its flagship Enchi Gold Project out of Ghana. What makes Ghana a favourable mining jurisdiction relative to its neighbouring countries in the West African region?
Ghana is a world-class mining jurisdiction with a long history of gold mining. It is currently Africa’s largest gold producer and the sixth largest gold producer globally.
Southern Ghana has been considered one of the world’s most prolific gold regions for discoveries for some time, with three of the top 10 major gold producers operating large-scale gold mines in-country (namely Newmont, Gold Fields, and AngloGold Ashanti).
The country also benefits from both strong merger and acquisition (M&A) and investment activity. Recent examples include:
- Newmont (TSX: NGT) invested approximately US$1B to expand production at its Ahafo mine
- In 2021, Shandong acquired Cardinal after an extensive bidding war between Nordgold and Shandong
- In 2022, Chifeng acquired Golden Star
- Announced in 2023, Gold Fields (JSE: GFI) and AngloGold Ashanti (NYSE: AU) signed a joint venture agreement to combine Tarkwa and Iduapriem to create the largest gold mine in Africa
Additionally, Ghana is a favourable mining country relative to its neighbours due to its stable government and strong infrastructure. Ghana’s democratic government wants mining to grow and thrive domestically, understanding the significant benefits the country and local communities can receive given the industry is a key contributor to its economy and tax base.
Ghana also benefits from modern infrastructure and skilled mining labour in-country, with several mining contractors’ Western African operations headquartered in Ghana.
The Bibiani Shear Zone is home to significant gold mines. Are you seeing any similarities between the Enchi Gold Project and neighbouring majors’ projects?
Newcore’s Enchi Gold Project is on-trend with some of Ghana’s most prominent mines, which are located along the Sefwi-Bibiani belt, one of three major gold-producing belts in southwest Ghana. Prominent mines situated on the belt include Newmont’s Ahafo mine as well as Asante’s Bibiani and Chirano mines.
The region has a long history of active exploration and mining, with Newcore’s Enchi Gold Project covering a significant portion of the regional structure that stretches for hundreds of kilometres. Enchi stretches along more than 40km of the Bibiani Shear Zone, which hosts Asante’s producing Chirano and Bibiani mines to the north.
Enchi has shown many similarities to its neighbouring mines, including numerous areas of oxide mineralization starting at surface, with drilling intersecting wide zones of gold mineralization containing higher grade core structures to depth.
The major gold deposits along the belt are structurally controlled and occur in splays coming off the larger regional structures. The project covers three such splays providing over 100km of prospective targets, and importantly, work on the project has identified areas with jogs, intersections, and multiple close-spaced structures, all of which are potential sites for gold deposition.
Additionally, the geology at Enchi, which includes volcanic and sedimentary units cut by intrusive rocks, is analogous to these other gold deposits along the belt.
Newcore announced an average gold recovery of 91.9% from bulk-scale pilot heap tests at the Enchi Gold Project back in November 2023. What are the key takeaways from these results for advancing the project?
Two bulk-scale pilot heap tests (leached for 60-days) were completed on two 15t composite samples of representative oxide mineralization, one from each of the two largest resource areas at Enchi — Sewum and Boin. Samples were collected from two trenches on the central portions of each deposit area and were completed specifically for metallurgical test work.
The strong results from this bench-scale testing, which most closely represents actual conditions for heap leach processing, confirmed the positive results from the extensive lab testing completed to date and continue to support the amenability of oxide and transition material at Enchi to heap leach processing.
Further, the pilot heap tests confirmed the quick recovery times and low reagent consumption reported in prior test work. This metallurgical test work is a significant milestone in continuing to de-risk the development of the project.
Overall recoveries are estimated to be around 90-95% based on all test work completed to date, which includes the pilot heap tests, bottle roll, and column test work. Results will be incorporated into an updated preliminary economic assessment (PEA) study already underway and targeted for completion in H1 2024.
Metallurgical test work is on-going, given its importance in de-risking the advancement of the project towards a construction decision. Metallurgical test work completed in mid-2023 on sulphide mineralization from the Nyam deposit also confirmed excellent recoveries averaging 91.7%, with additional work underway.
What are the next steps for Newcore Gold looking forward?
Newcore will continue to focus on de-risking the project. For the first half of 2024, the company is focused on completing an updated PEA study, along with additional metallurgical test work on both oxide transition, and sulphide mineralization.
The updated PEA study will incorporate the updated mineral resource estimate (MRE) that was released in 2023, as well as the results of extensive metallurgical test work completed to date, and updated cost estimates since the last PEA was completed in 2021.
We have engaged independent engineering consultants Lycopodium, Micon International, and SEMS exploration to prepare the updated PEA. These independent engineering consultants have a strong track record of involvement with economic studies and building mines in West Africa.
Newcore frequently attends 121’s Mining Investment Event in Cape Town. What does the company aim to achieve at the event, and what sort of investors is the company hoping to attract?
Newcore has a very strong shareholder base. The board of directors and management own approximately 20% of the equity, alongside an institutional investor base that owns approximately 45%. Key institutional shareholders include Franklin, Ruffer, Aegis, Merk, and Adrian Day.
The company focuses its efforts at the 121 conference on meeting with new potential equity investors, existing investors, as well as corporates.
The conference is an important tool for connecting with existing investors and corporates to provide a detailed update on the development activities completed and those that are underway.
It is also an excellent opportunity to engage with new investors that may not be familiar with the district scale potential of the Enchi Gold Project along with its significant de-risking and development work completed since 2020.
These developments include: metallurgical test work, a 2021 PEA (update underway), an updated MRE in 2023, and over 90,000m of drilling completed with a focus on unlocking the size and scale potential at the project.
This drilling has meaningfully expanded the mineralized footprint by defining potential resource growth at existing resource areas, identifying new discoveries from successful first pass drilling on early-stage targets, and intersecting high-grade gold in sulphide mineralization to depth.
The conference is a great forum to connect with peers and continue to build-out the company’s strong investor base.
Why should investors keep Newcore top of mind?
Relative to its peers, Newcore is in a unique position as it checks the boxes on three key areas for success:
- An asset with size and scale potential located on a prolific gold belt in Ghana
- A team with a proven track record that is aligned with shareholders through their 20% equity ownership
- Institutional investor support to continue to advance the development of the project
The Enchi Gold Project is located on a prolific gold belt that hosts multi-million-ounce gold mines. The project’s value is underpinned by an established MRE, a PEA study (update underway), with further upside potential from the district scale exploration opportunity.