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Drilling at Newcore Gold’s (TSXV: NCAU) Enchi project in Ghana has returned the highest-grade gold intercepts in its 10-year history, the company said Wednesday.
Hole KBRC301 cut 1 metres at 204 grams gold per tonne over from 59 metres depth, along with 2 metres of 1.46 grams gold per tonne. A highlight result from hole KBRC307A returned 28 metres of 3.36 grams gold per tonne from 120 metres depth, including 2 metres of 37.58 grams gold.
These results show strong continuity and expansion potential at Enchi’s Boin deposit, CEO Luke Alexander said. Newcore is in the midst of a 10,000-metre reverse-circulation drill program to convert inferred resources to indicated and to expand known mineralization.
Hole KBRC301 (see cross-section below) returned the project’s highest-grade interval, and on a gram-by-metre basis.
“Results not only continue to prove out the open-ended nature of the deposits, which is consistent with our geological model, but continue to highlight the potential for high-grade gold mineralization,” Alexander said in a statement.
Ghana is Africa’s top gold producer, according to World Gold Council data, and is considered a Tier 1 jurisdiction. Miners such as Newmont (TSX: NGT; NYSE: NEM) and Galiano Gold (TSX: GAU; NYSE American: GAU) are active in the region.
Newcore’s Toronto-quoted shares gained as much as 4.5% during intra-day trading, before falling to its prior close at C$0.315. Shares have ranged between C$0.10 and C$0.39 over the past 12 months and it has a market capitalization of C$65.7 million ($47m).
An updated preliminary economic assessment (PEA) in April pegged the initial capital cost at Enchi at $106 million. It envisions an 8.1-million-tonne-per-year, nine-year open-pit, heap-leach operation with all-in sustaining costs at $1,018 per ounce.
The study raised Enchi’s net present value by 75% to $371 million. It also boosted the internal rate of return to 58% at a gold price of $1,850 per ounce. According to the PEA, Enchi could produce 121,839 oz. annually, a 36% increase over prior forecasts.
Over its life, Enchi could produce over a million ounces at five key deposits: Sewum, Boin, Nyam, Kwakyekrom, and Tokosea. Newcore plans to haul ore to a central crushing and heap leach facility located between Boin and Sewum, which host 76% of the resource.
The project spans 248 sq. km along Ghana’s Bibiani Shear Zone, a belt hosting multi-million-ounce mines. Drilling in the sulphide mineralization at Boin has reached an average depth of just 125 metres. This suggests great potential for resource expansion, as the deposit remains open at greater depths.
Newcore aims to move Enchi toward pre-feasibility, aiming to start work formally next year. In the mean time, the company expects to release regular news flow with 2,060 metres of assays pending from recent drilling at Boin.
It will also explore the expanded property, which now includes the Omampe licence, acquired in February, that added 32.1 sq. km.
