Australian gold company, Bassari Resources Limited (ASX: BSR) is focused on discovering and developing multi-million ounce gold deposits in the Birimian Gold Belt, Senegal, West Africa. The company currently has mineral tenements of around 312km² of prospective Birimian Gold Belt. Bassari is extremely positive of the much larger exploration potential that exists within the Makabingui Gold Project exploitation permit, and the Moura permit. In order to transition from an explorer to a producer, the company is rapidly progressing with the development of Makabingui Gold Project with an intention to bring it into production this year.
Makabingui Gold Project
Makabingui Gold Project is the most advanced project of Bassari Resources Limited. The mineral resource at this gold project comprises of 11.9 million tonnes averaging 2.6 g/t Au for a contained 1 million ounces of gold classified into the Indicated (336,000 oz in 2.6 Mt at 4.0g/t) and Inferred Resource (669,000 oz in 9.3 Mt at 2.2g/t) categories, with 158,000 ounces classified as reserves.
The Open Pit Feasibility Study for the initial open pit mining phase delivered outstanding results:
Makabingui Gold Project Ore Reserve (Source: Company Reports)
Makabingui Gold Project Feasibility Study
Recent Progress at Makabingui Gold Project
The company has made significant progress to bring this project into production. This includes receiving funding from Coris Bank – Senegal, the project loan financier, which enabled significant equipment purchases required for production start-up to be made. As at 30 June 2019, Bassari Resources had drawn total funds of approximately $7.7 million.
Mining consultant, Mining Plus, has completed the new mine design, which includes finalising the block modelling, pit optimisation, mine design, and mine scheduling. The company has also completed the first pass grade control drill hole planning.
As per the June quarterly report, the company has completed clearing of the mine permit boundary fence. By the end of the June quarter, 90% fencing was complete. Further, mine ROM pad and mine waste dump locations have been finalised with the haul road from the ROM pad to the channel also completed. In addition, the important dam repairs have been completed.
Further, the company has set up a 30-man security team and is now aiming to increase the current 120-person capacity at the Douta camp by a further 20 places and upgrading and increasing the kitchen and laundry capacity. The company has completed development works of the mine access road to the Douta village after getting the Douta villagers’ approval.
On the plant and processing facilities construction, the company informed that it has completed the clearing of the tailings dam storage facility. The contractor for the partial dismantling of gravity circuit has been finalised, with a purchase order being prepared. Further, the company has finalised the power load estimations for the camp and processing plant generators to allow purchase orders to be prepared.
At the recent AGM, the Chairman highlighted that the company is completing all matters as speedily as possible to bring Makabingui into production.
New Makabingui Gold Zone Discovery
Bassari Resources has discovered an encouraging new gold zone, located around 800 metres to the east of the one million ounce Makabingui resource. A sampling study conducted by Bassari’s geologists has confirmed that the entire Makabingui gold system is still open and is appearing to be swinging around in an easterly direction around the Sambarabougou granite.
Makabingui gold deposit and the new eastern prospect with rock chip result (Source: Company Reports)
Moura Exploration Permit
The company holds a 63% interest in the Makabingui exploitation permit through its subsidiary Makabingui Gold Operation SA, and a 70% interest in the Moura permit (permit titles held by a third party).
Located around 750 km east of Senegal’s capital city of Dakar and about 70 km northeast of the town of Kedougou, these permits cover approximately 312 km2 in a central location of the highly prospective Birimian Kenieba Inlier.
The Moura permits contains the Konkoutou, Kawsara, Bountou, and Sambali Prospects (refer below image).
Moura Permits (Source: Company Reports)
Konkoutou Gold Prospect – Located around 35 km north east of the Makabingui Gold Project and centered on a low hill approximately 700 metres long and 100 metres wide;
Konkoutou North, East and West- This prospect is a Drill target with a strike length of approximately 1 kilometre across and 300m wide; located on an intersection of structures oriented north east, east-north-east and north-west; The Konkoutou group of prospects have the largest and strongest geochemical gold-in-soil anomaly on the Bassari leases.
Kawasara– Prospect has a strike length of approximately 2 km across a 300 metre wide zone, characterised by sporadic soil anomalies but very encouraging trench intercepts.
Bassari Cash Flow Position
In the first six months of 2019, the company has spent $2.74 million on development activities, $1.07 million on staff costs and $440k on administration costs, taking the total cash outflow for operating activities to $4.27 million. During the June quarter, the company received $5.16 million of cash as proceeds from borrowings. As at 30 June 2019, the company had a negative cash balance of $3.34 million.
For the September quarter, the company is expecting to incur a development cost of $400k, staff costs of $550k and administration and corporate costs of $250k. The total estimated cash outflow for the September quarter is $2.7 million.
Stock Performance: At market close on 6 September 2019, BSR’s stock was trading at a price $0.014 with a market capitalisation of circa $32.18 million.
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