A Quick Look at Emerging Small-cap Gold Company, Bassari Resources’ Financials

Bassari Resources Limited (ASX: BSR) is an Australian listed small-cap gold company which is currently in the process of transitioning itself from explorer to producer. Currently trading with a market cap of around $35.21 million (as at 15 October 2019), Bassari Resources is focused on discovering and developing multi-million-ounce gold deposits in the Birimian Gold Belt, Senegal, West Africa.

The company intends to bring its Makabingui Gold Project, located in Senegal, into production in 2019 and has been working very hard to achieve this outcome.

Notable Highlights of Bassari Resources

• Makabingui Gold Project- Hosts a Mineral Resource, which comprises 11.9 million tonnes averaging 2.6 g/t Au for a contained 1 million ounces of gold classified into the Indicated and Inferred Resource categories, with 158,000 ounces classified as reserves;
• Makabingui Gold Project Feasibility Study – Initial high-grade open pit project of 1Mt at 5.7g/t for 174,000 oz production inventory, $678/oz cash cost, US$90m pre Capex after tax cash flow in first three years, and expansion anticipated from underground and infill drilling of 8km Makabingui South zone;
• Well located tenements in a +60-million-ounce gold province hosting world-class deposits;
• Multiple prospects identified along 60km of partially drilled mineralised strike

Bassari’s Financials

Recently on 13 September 2019, the company released its half year results, wherein, the company reported loss after tax of $941,000 for the period, which mostly includes corporate expenses of $197k and employment and consultant costs of 601k. Besides this, during the period, the company spent $57k on occupancy costs and $87k for Travel and accommodation.

For the period, the company reported basic and diluted loss per share of 0.04 cents, in line with previous corresponding period (pcp).

The company’s total current assets increased from $186k on 31 December 2019 to $629k on 30 June 2019, representing an increase of 238%. As at 30 June 2019, the company had current assets of around $11.33 million, taking the total net assets of the company to ~$57.28 million.

During the period, the company made a payment of $1.34 million to suppliers and employees. Further, the company made payments of $3.857 million for capitalised exploration, evaluation and development expenditure and $2.295 million for the purchase of property, plant and equipment. During the half year period, the company obtained $7.84 million of cash as proceeds from borrowings (loan financing for investment in Makabingui Gold Operation).

At the end of the half year period, the company had a cash and cash equivalent of $521k. Subsequent to the half-year period, the company issued 15,928,573 ordinary shares at $0.014 per share, raising $223,000 for additional working capital.

Progress at Makabingui

Several key activities/ tasks completed at the Project include:

• Security accommodation for the 30-man security team;
• The haul road construction from the plant to the mining area is well underway with 13 kms now cleared (as reported on 7 October 2019);
• Extension of the housing capacity at the camp to 200 from 114;
• Procurement of five Toyota pickups and a bus for Makabingui project;
• Upgradation of the workshop and is currently operational;
• Ordering of major components of the processing plant including ball mills, screens, cyclones;
• Awarded the pre-mining grade control drilling contract to AMS Drilling with drilling of Pits one and two to commence in October 2019;
• Mining consultants, Mining Plus of the UK Completed the of the new mine design.

Upgraded Mess Facility (Source: Company’s Report)

Douta Clinic (Source: Company’s Report)

Recent Exploration Work

The recent exploration work at the project has uncovered a number of gold extensions and significant gold anomalies. Additionally, the company’s exploration team has identified several encouraging gold prospects in and outside the current pit shell of Pits 1, 2, 3 and 4. The company intends to conduct further drilling to convert these prospects into a resource as well as to expand the reserves.

• Pit 1 - this deposit of 110,000 of proven oz at 7.6 g/t is still open to the north and at depth; in addition, drilling has exposed underground potential
• Pit 2 - this deposit of 51,000 oz at 3.8 g/t is still open to the south and at depth
• Pit 3 - this deposit of 5,000 oz at 3.1 g/t is open on strike and at depth
• Pit 4 - this deposit of 13,000 oz at 5.9 g/t is open on strike and at depth

At market close on 17 October 2019, BSR stock was trading at a price of $0.013 with a market cap of $35.21 million.

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