Aureus Mining ‘not a one-horse show’

Aureus Mining (TSX: AUE; LSE: AUE) has doubled the size of the aggregate resource at its Ndablama deposit in Liberia, just 40 km northeast of where the company is building its flagship New Liberty gold mine.

“We’re pleased because we wanted to highlight to the market our potential for a second deposit,” David Reading, Aureus’ president and CEO, says in a telephone call from London. “It says we’ve got a district play … it shows investors it’s not a one-horse show, it’s a company with more than one asset.”

Indeed, Aureus has only drilled 1.2 km of the 13 km gold belt on its mining licence.  

“We’re excited about the district play and where it could go,” Readng continues. “In the short term, we wanted to demonstrate there are mineable ounces there, and the project is going to get bigger.”

Using a 0.5-gram cut-off grade and a conceptual US$1,700 per oz. open-pit, indicated resources stand at 7.6 million tonnes grading 1.58 grams gold per tonne for 386,000 oz. gold, with inferred resources adding 9.6 million tonnes averaging 1.70 grams gold for 515,000 oz. gold.

The previous resource estimate, completed in November 2013, has defined an inferred resource of 6.8 million tonnes grading 2.10 grams gold for 451,000 oz. gold.

Ndablama was an in-house discovery on the company’s 457 sq. km Bea Mountain mining licence. The deposit occurs within a 13 km zone of continuous gold-in-soil anomalies that straddle the geological contact between a granite batholith and a metavolcanic rock package. Ndablama lies on the western edge of a shallow-dipping shear, in a pressure shadow area of the granite batholith to the east, and gold mineralization is related to shear deformation.

Early metallurgical test work for Ndablama appears encouraging, Reading says, noting that the company expects to have optimized numbers out in next year’s first quarter. 

Andrew Breichmanas of BMO Capital Markets says the initial metallurgical test work “confirmed simple, non-refractory gold mineralization, with expected recoveries of 92–94% and 70%  gravity recovery from sulphide samples suggesting some potential for a stand-alone operation if resources can continue to grow.”

“Targets such as Ndablama sitting within a prospective 13 km mineralized pressure shadow corridor continue to suggest longer-term potential on the mining licence,” Breichmanas adds.

The London-based BMO analyst has a 50¢ target price on the stock. At press time, Aureus shares traded at 31¢ within a 52-week range of 28.5¢ to 65¢.

Liberia, which was founded by freed American and Caribbean slaves in 1847, is Africa’s oldest republic and borders Sierra Leone, Guinea and Côte d’Ivoire.