Channel Resources keeps hopes alive in Burkina Faso

Five years ago, Channel Resources (CHU-T) was one of many Canadian juniors exploring in the West African nation of Burkina Faso. Today, it’s one of the few still on the trail of bulk-tonnage gold deposits similar to those being mined in neighbouring Mali and Ghana.

“Most of the juniors have packed up and gone home,” says Jean-Marc Lulin, president and chief operating officer. “We’re the most active junior there today, and we’re pleased to work here. It’s a highly accessible, geologically prospective and poorly explored country. It’s 20 years behind the surrounding countries, but I have no doubt that sooner or later Burkina Faso will be on the mining map.”

Channel holds 10 exploration permits in the country, including one at the feasibility stage and two optioned to Placer Dome (PD-T). The major also has an equity interest of just under 15% in Channel.

The junior’s exploration efforts are overseen by Lulin, a senior geologist who lives and spends most of his time in Burkina Faso. “It’s politically stable and a very pro-active country for mining, with one of the most competitive mining codes,” he says.

Lulin points out that Channel has a clear exploration strategy: “We’re looking for open-pittable oxide deposits that are free-digging and heap-leachable. In the past five years, we’ve made four discoveries, which collectively host 2.5 million ounces of gold, or about 25% of the country’s known resources.”

The gold targets occur in Birimian volcanic, intrusive and sedimentary rocks in the West African Precambrian Shield. The deposits are typically associated with alteration zones and/or discontinuous swarms and quartz veins in deformation corridors.

The exploration programs generally entail airborne magnetics and radiometrics, satellite imagery, soil geochemistry, field geology, prospecting and a combination of rotary-air-blast, reverse-circulation (RC) and diamond drilling. Channel’s average discovery cost to date is a mere US$6 per oz., well below the world average of US$30 per oz.

The most advanced of the two permits optioned to Placer Dome is Bombore, which is one hour by paved road east of Ouagadougou, the capital city. The major can increase its interest to 65% by spending US$5 million on exploration and a feasibility study.

Seven zones at the Bombore First target host an oxide gold resource of 35 million tonnes grading 1.1 grams gold per tonne, including 3.3 million tonnes of 3 grams. This inferred resource is based on a cutoff grade of 0.5 gram gold.

The seven zones cover a cumulative length of 8.5 km from surface to an average depth of 50 metres.

The deposit is controlled by a major shear zone and hosted mainly by metagabbro, mafic-to-intermediate metavolcanics, and sericitic schists. Gold mineralization is disseminated and associated with large zones of quartz veinlets with minor sulphides.

The next phase of work will include RC drilling to test the deposit’s strike and depth extensions, as well as infill core drilling and metallurgical testing.

Placer Dome also holds an option to earn a 60% interest in the Somifa permit by spending US$5 million on exploration, and an additional 5% by financing a feasibility study. A work program funded by the major is planned for this year.

“Our agreement with Placer allows us to continue as operator,” Lulin says. “We think that reflects on the quality of our company, our assets and our exploration team.”

The Somifa permits include two zones at Goulagou, which together host 16.3 million tonnes of 1.2 grams gold, including 6.5 million tonnes of 1.75 grams gold. The permit also covers 26 additional prospects that have yet to be fully explored, as well as untested deep sulphide prospects.

Preliminary metallurgical work indicates that gold recoveries ranging from 84% to 95% can be expected, suggesting the oxide mineralization is potentially heap-leachable.

A feasibility study is under way at the Bouroum permit, which hosts an indicated resource of 12.4 million tonnes grading 1.3 grams gold in three zones. Seven additional prospects have yet to be tested.

Viceroy Resource (VOY-T) can earn a 60% interest by completing a feasibility study by the fall of this year.

Channel has outlined an inferred resource of 1.2 million tonnes grading 2.7 grams gold at its wholly owned Tounte permit. A work program, planned for this year, will attempt to expand and upgrade this resource, as well as test the property’s potential for higher-grade gold zones.

Work is also planned for the 95%-owned Barao permit, which covers several gold prospects and a strong zinc anomaly.

Lulin says Channel’s goal, over the next three years, is to double existing resources and then develop several mines. “We’d like to see Placer operate several large-scale mines while we operate several smaller-scale ones.”

He adds that even a small operation would have a major positive impact on Burkina Faso, which, as one of the poorer nations in West Africa, is struggling to develop its economy.

Channel’s chairman and chief executive officer is Ross Fitzpatrick, who is also a member of the Canadian Senate.