Channel Finds Gold, Stability in W Africa
By Ted Niles
Mining interest in Burkina Faso has grown remarkably over the last two decades. Channel Resources Ltd TSX:CHU has been there from the beginning. “Several significant projects iin Burkina were early Channel discoveries,” says Senior Vice President Cyrus Ameli. “When the price of gold and the whole exploration market really came off in the late 1990s-early-2000s, it was impossible for Channel to properly finance the exploration of these projects. There was a period where the company had to pull back from the projects and optioned a number of them away to different companies. Orezone Gold Corporation’s TSX:ORE Bomboré project was the last one.”
Retaining the Tanlouka gold project—itself formerly a part of the Bomboré project area—Channel refocused its energies on a number of projects in Ecuador. This proved fruitless for the company, as that country’s instability made exploration progressively more difficult. By 2007, it was virtually impossible. Ameli and President/CEO Colin McAleenan joined Channel that year. “Given the political risk and the expense of working in Ecuador, that was really the last straw for us in terms of our involvement there,” Ameli states. This unfortunately coincided with the market crash of 2008; a “double whammy” that drove the company’s stock as low as $0.01.
However, Ameli says, “All through this time we’d been looking at the Tanlouka project, getting familiar with it. After Colin and I joined the company, we saw its potential based on the work that Channel had done previously.”
The 79-square-kilometre Tanlouka project is situated on the Markoye Shear Zone in West Africa’s Birimian Greenstone Belt. The Belt itself hosts numerous gold deposits, most notably AngloGold Ashanti’s Obuasi mine and Newmont Mining Corporation’s TSX:NMC Ahafo mine, both in Ghana.
The Markoye Shear Zone, which trends 450 kilometres north-south from Ghana through Burkina Faso, includes IAMGOLD Corporation’s TSX:IMG Essakane project, Orezone’s Bomboré project and Volta Resources Inc’s TSX:VTR Kiaka project, each with at least 3 million ounces gold. Moreover, given Tanlouka’s proximity to the Bomboré project, it is worth noting that Tanlouka shares some of its infrastructure advantages. Namely, highway access and proximity to the capital, Ouagadougou. Burkina Faso has other advantages. In its 2010-2011 Survey of Mining Companies, the Fraser Institute ranks it the second-best mining jurisdiction in Africa, after only Botswana.
Channel undertook an initial 11-hole drilling in 2010 to assess a number of targets at Tanlouka. “The Mankarga 5 zone is our main focus right now,” Ameli relates, referring to the company’s more expansive 15,000-metre drill campaign. “We have been quite fortunate in being able quickly to delineate what is, right now, a 1.85-kilometre-long strike length. We haven’t yet completed geological modelling on it, but we’re confident that we’ve discovered a zone with a horizontal width of up to 200 metres.”
September 14 assays of Tanlouka’s Mankarga 5 deposit include
- 1.99 grams per tonne gold over 70 metres (including 6.47 g/t over 13.5 metres)
- 1.1 g/t over 108 metres (including 2.32 g/t over 20 metres)
- 0.92 g/t over 98.7 metres (including 1.15 g/t over 30 metres)
- 1.2 g/t over 52.5 metres (including 5.67 g/t over 4.5 metres)
- 0.77 g/t over 64.5 metres (including 1.32 g/t over 11.3 metres)
Ameli says of the results, “[They] are quite positive on a number of levels. First and foremost, they’re bearing out what we encountered with the RC [reverse circulation] program. We did some comparative holes—a comparison of similar intersections—and it showed by and large an increase in the grade. In some cases, not a lot—in, I think, one case it actually went down. But it’s showing that the RC grades that we encountered have been accurate or to a certain extent have been underestimating the true grade. It also shows that the deposit is indeed still open, that we can extend it further down to the south, past the existing 1.85-kilometre strike length.”
Burkina is one of the fastest growing producers in the world —Cyrus Ameli
The two rigs Channel has turning at Tanlouka are presently on break, due to the seasonal rains. They will resume shortly. The 2011 drill campaign is nearly half completed, and Ameli expects the project’s first resource estimate to be published by 1Q 2012. “From there on, it will be additional drill programs to expand on the resource to feed into a preliminary economic assessment; we don’t have a timeline for that at this point. The Mankarga 5 area is a very small part of the project, and we’ve identified a number of different target areas within the Mankarga zone, as well as further to the north on the property that really require some follow up, both in terms of further ground proofing as well as drilling. That’ll be happening over the next several months as well.”
Channel’s other major project is the Fox Creek lithium/potash project in west-central Alberta.
Ameli considers that Channel is undervalued compared to many of its peers in Burkina, but believes this will become evident with the release of a resource estimate. At press time, Channel has 111.6 million shares trading at $0.19 for a market cap of $21.2 million.
Ameli concludes, “Burkina is one of the fastest growing producers in the world. The business environment is quite stable. It encourages investment, so that forms the basis of our involvement there. In the last five years, I believe, five projects have gone into production. Which is a very rapid pace. We hope to participate in that as we move forward with Tanlouka.”