Teranga Gold Corporation TSX:TGZ announced assays from its Sabodala gold mine in Senegal, West Africa. Results include
1.2 g/t gold over 130 metres (including 7.2 g/t over 4 metres)
5.7 g/t over 3 metres
8.4 g/t over 2 metres
1.6 g/t over 45 metres (including 6.8 g/t over 3 metres)
3.1 g/t over 9 metres
1.1 g/t over 160 metres
1.2 g/t over 67 metres
1.3 g/t over 80 metres
1.6 g/t over 36 metres
VP Investor Relations Kathy Sipos tells ResourceClips.com, “In December 2010 we did an IPO and got listed on the TSX. We’re a spin out from Mineral Deposits Ltd TSX:MDM, which is an Australian company that had two significant assets, one being minerals sands and the other being a gold asset. They were more focused on the mineral sands, so they spun the gold asset out and brought in a new management team and formed a new company, Teranga. Our management team has worked together for a long time, some of us close to 20 years. Alan Hill, our Chairman and CEO, Richard Young, our President and CFO, myself and Yani Roditis, our VP Operations—we all worked at Barrick Gold Corporation TSX:ABX together. Alan was responsible for all the acquisitions that Barrick did, as well as the reserves and development of virtually all their projects from 1983 through to 2003. He more or less built seven mines on four continents. Together, we went to another company called Gabriel Resources Ltd TSX:GBU and were there for several years together and then were presented with this opportunity at Sabodala.
There are certainly some advantages to being the first company in a prolific area like this with a government that wants you to find more—Kathy Sipos
“What we initially knew about Sabodala was that it was an operating mine that had a very short reserve life, but had a fabulous operation built to a Barrick standard. When we really looked into it before we joined the company, it wasn’t the 33 square kilometres of the Mine License, but the 1,488-square-kilometre land package surrounding the mine that was of significant interest to us.
“Mineral Deposits Ltd built a $330-million plant on the property, and it’s the only mill in Senegal,” Sipos continues. “Senegal’s really only been open for mining for the last few years. The mining code came in 2003, and it’s only been since 2005 that people have been going in and exploring. And they’ve already found 10 million ounces of gold on the Senegal side. Across the border, Mali has been open for mining for closer to 20 years and has found 40 million ounces. So it’s a very prolific new area. The President and the CEO say that Senegal has one of the best mining codes they’ve ever seen. Very mining friendly, and it’s a great host country. There are certainly some advantages to being the first company in a prolific area like this with a government that wants you to find more.
“We have a large exploration program going on this year, about $35 million. As we’ve had success, we’ve put more money into it. We have two distinct exploration programs. One is on the Mine License, which we’re spending $10 million on—which is the 33 square kilometres around the mill. Then we have another program, which is the regional exploration program, where we’re spending $25 million on the land package around the mill.
“Mineral Deposits Ltd did virtually no exploration, so we have a lot of opportunity. On the Mine License alone—where we plan to drill about 60,000 metres this year—we have seven drill rigs. We plan to drill about 90,000 metres on the regional exploration package, and we have 11 drill rigs there. Throughout the year, we’ve had a tremendous amount of drilling going on—and unfortunately a tremendous backlog of assays. So we haven’t been able to have the news flow that we expected. November 2 was the first significant update, then we put one out November 23.
“Generally the excitement we’re seeing right now is on the Mine License. Which is fantastic because these ounces are already permitted; they’re around the mill and therefore can go straight into the mill. We are focused on a couple of areas specifically. One of them is just north of the pit—it’s called the Main Flat extension—and the last two press releases were primarily an update of that area. What the drilling is showing is that the pit we have is going to get much bigger. We’re seeing similar grades to our reserve grade, and the pit looks like it’s going to pull 50 to 100 metres below where we originally thought. It’s also going to pull to the north.
“We’re also having very good results on something called Ayoub’s Thrust, which goes up on a northerly trend from the pit. Ayoub’s is the westerly structure of the actual pit we have now, and that structure continues. As you go deeper in the pit, you need to lie back further out, and because that area is mineralized as well, we’ll be able to lower the cost of deepening the pit, and obviously it becomes far more economical. We are now very confident that we can double our reserves on the Mine License alone from the current 1.5 million ounces to 3 million ounces over the next 12 to 18 months.”
Sipos concludes, “We have a tremendous asset, and we’re fortunate to be in a country that is a welcoming host to mining. I think we have a tremendous amount of upside and, fortunately, the financial capability to be able to realize that value.”
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VP Investor Relations
by Ted Niles