Vancouver — Partners
The partners recently boosted their proposed drilling budget by US$1.4 million to US$3.8 million in hopes of bringing the project to the production-decision stage by June 2006. The drill results will be used for a new resource calculation, scheduled for release in June, and will be incorporated into a full feasibility study slated to begin in September.
Ian Cockerill, chief executive of Gold Fields, gives the project a rousing endorsement. In contrast to 16 other exploration projects dropped for “not matching the [Gold Fields] franchise,” Essakan is “a significant find” that has yet to be fully explored, says Cockerill.
The senior gold producer, currently ranked fourth in the world, seeks projects with potential to meet its “rule of twos.” To make the grade, projects must have potential for at least 2 million oz. gold and be capable of producing at least 200,000 oz. annually at cash costs less than half the commodity price, along with double-digit rates of return.
Like many other gold prospects in Africa, Essakan was discovered by local miners who exploited its shallow, gold-bearing quartz veins. In the late 1980s and early 1990s, these artisans mined roughly 500 kg gold per year.
Orezone focused its efforts on a wide, near-surface, oxide gold deposit hosted in a volcano-sedimentary sequence in a regional greenstone belt. The project area is 330 km northeast of the capital, Ouagadougou.
The Essakan Main zone has been tested by more than 35,000 metres of drilling. At last report, it hosted a resource containing 2.2 million oz., with gold grades averaging 2 grams per tonne.
Previous drilling revealed the presence of higher-grade lenses and shoots, and returned encouraging intersections, such as 45 metres grading 10.2 grams gold per tonne, and 5.9 grams over 56 metres.
In addition to resources identified to date, the joint-venture land package covers numerous satellite deposits within a 10-mile radius of the known main deposit. The property also has low-grade, bulk-tonnage targets that are believed to be amenable for heap-leach processing.
Work programs at Essakan are funded by Gold Fields, which has rights to earn a half-interest by spending $8 million on exploration. The gold producer will have surpassed this commitment once the current program is complete. It can then boost its interest to 60% by completing a bankable feasibility study.
Orezone operates the work programs and will be carried through to the production-decision stage. Thereafter, the company will be responsible for 40% of production development costs.
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