Bassari Resources Reports Significant Development Progress During September Quarter

West African gold developer Bassari Resources Limited (ASX: BSR) is inching closer to become a gold producer. Incorporated in 2008, Bassari Resources has been conducting significant exploration work on gold exploration permits in Senegal, West Africa. The exploration work has led to the discovery of a number of highly prospective gold anomalous zones, in particular, the Makabingui gold discovery.

Key Highlights of Bassari’s Makabingui Gold Project

• Significant developments to mining infrastructures
• Potential Extensions on strike and at a depth of existing resources
• 12 km long gold corridor at Makabingui South Prospect
• New gold lodes at Makabingui East
• Significant gold anomalies throughout the entire exploitation permit

Bassari Resources intends to develop its numerous gold assets, especially Makabingui Gold Project, in order to become a major gold producer over the ensuing years.

Time and again, Bassari has conveyed its intentions to bring its Makabingui Gold Project in 2019.

With 2019 coming to an end, the company has intensified its efforts to develop and bring the project into the production stage. In the September quarter, the company made significant progress in bringing its Makabingui Gold Project into production.

Bassari Invests on Development

Bassari spent around $1.36 million on development activities during the quarter, taking the total year to date cash expenditure on development activities to $4,108 million. The cash expenditure on development activities during the September quarter is significantly higher as compared to $405k in the previous quarter, demonstrating Bassari’s increased focus on the development activities during the quarter.

Bassari intends to spend further 1.5 million on development activities during the December quarter.

Cash outflow from operating activities during the September quarter was $2.8 million. The company invested $2.07 million on property, plant and equipment during the quarter. The total proceeds received from borrowings during the quarter was $3 million. At the end of the September quarter, the company had a negative cash and cash equivalents balance of $1.41 million. The total estimated cash outflows for the December quarter is around $3.95 million.

Bassari Purchases Equipment from Project funding

With the help of the project finance loan, Bassari Resources purchased additional equipment. The total funds drawn down to 30 September was approximately $10.7 million. Major equipment components of the processing plant have been constructed.

Bassari Raises Working Capital via Placements

During the September quarter, the company raised $257,000 via a placement to sophisticated investors in order to have sufficient working capital to support its operations. Subsequent to the September quarter, Bassari further raised $602,000 by placement to sophisticated investors.

Commences Drilling at Makabingui Project

During the quarter, the company commenced drilling at the project on a 10x10 metre pattern. The pattern will eventually be reduced to 10x5 metre for a proper evaluation to be made of the pits 1 and 2 gold reserves.

Pre-production works

During the quarter, the company undertook and completed various tasks which include upgrades to the medical clinic, extension of the mess facility, increasing the housing capacity at camp by the construction of new quarters and the completion of workshop area upgrade.

(Source: Company’s Reports)

Development Progress Highlights

• A project development fund finance loan of 7 Billion FCFA (USD12 million) provided by Coris International Bank is in place;
• Procurement packages completed and paid for with the equipment shipments underway;
• The pre-mining grade control drilling contract has been awarded to AMS Drilling with the drilling of pits 1 and 2 has commenced;
• Other important contracts are in the process of negotiation and finalisation including the mining, the gold refining etc;
• Fencing of the mine area is nearly completed;
• Setting out of access roads to the Douta plant site to reflect the layout design required for Makabingui ore processing operations;
• Repaired river crossing near Sambarabougou village to give all weather access to the village and Makabingui mine site;
• Completed repairs to some culverts at water crossings on the haul road from the Makabingui mine site;
• Established important contracts with various service providers in Senegal (plant equipment, fuel suppliers, sewage plant suppliers, security, fencing, building products including cement, aggregate, sand, re-inforcing bar etc).

What are the future objectives of Bassari?

As stated above, this small-cap gold developer intends to develop its various gold assets via its exploration programs with an objective of becoming a major gold producer over the ensuing years.

This objective will be met by earning significant cash flow by bringing into production the 4 high grade pits within Makabingui gold resource.

These Cash flows will then be utilized to convert more of the one-million-ounce gold resource at Makabingui into economic mineable reserves as well as to convert the new gold discoveries into economic mineable reserves wherever possible.

At market close on 1 November 2019, BSR stock was trading at a price of $0.015 with a market cap of ~$35.21 million.

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