Archie Koimtsidis, cofounder and CEO of Cardinal Resources (TSX: CDV; ASX: CDV), is confident that the company’s Namdini gold deposit will become the first big gold mine ever built in northern Ghana.
Historically, virtually all of the exploration for gold in the West African nation has been in the south, he says, closer to the capital of Accra on the Atlantic coast, where infrastructure is better and exploration easier.
“Northern Ghana is largely savannah — very dry and harsh terrain — where electricity and water was scarce many years ago, and, as a result, all the focus was on the south,” the Australian mining executive says in an interview. “We’re the first major company attempting exploration in the north … Namdini will be the first significant mine to open up the northern half of the country and it will become an economic engine for the region.”
A drill crew at work at Cardinal Resources’ Namdini gold deposit in northern Ghana, 40 km south of the Burkina Faso border. Credit: Cardinal Resources.
Namdini, 40 km south of Ghana’s border with Burkina Faso and 20 km from the town of Bolgatanga in the Red Volta river valley, has a global resource of 4.2 million oz. gold, and Cardinal expects to upgrade this before year-end.
“It’s exciting because this deposit is 1,000 metres long and 300 metres wide, and we’ve got data down to 600 metres and it keeps going, and we haven’t found the boundaries yet,” Koimtsidis says.
The company’s resource estimate was based on 20,000 metres of drilling and finished within 18 months of its first drill hole. Since then 33,000 metres have been drilled. Another 2,000 metres will be drilled before the company upgrades its resource later this year. The resource is open along strike and at depth.
Namdini’s indicated resource stands at 8.3 million tonnes grading 1 gram gold per tonne for 270,000 contained oz. gold, and its inferred resource measures 114.7 million tonnes grading 1.1 grams gold for 3.9 million contained oz. gold. The resource estimate uses a cut-off grade of 0.3 gram gold per tonne.
“Cardinal is poised to unlock the potential of one of the largest discoveries in the last 15 years,” Nana Sangmuah, a mining analyst at Clarus Securities, said in a research note on July 10, the day Cardinal listed on the Toronto Stock Exchange.
“We see potential for a 30% to 50% growth in the 4.6 to 7 million oz. resource, based on recent stepout drilling that extended the mineralization downdip by 70% to 600 metres deep over a 600-metre strike length, and intercepted grades that were higher than the existing resource.”
If Namdini can get to 6 million oz. it would be the largest discovery in West Africa and the fifth-largest discovery globally in the last decade, the Ghana-native adds, “making Namdini a coveted asset for the majors, many of which face a declining production profile.”
He says that “in the last 15 years, nine of the 15 discoveries in West Africa have been acquired, six of which had a smaller resource than Namdini’s current resource.”
Workers in the core shack at the Namdini gold project. Credit: Cardinal Resources.
Cardinal’s shares opened on the TSX for the first time at 54¢ and are trading at 65¢. Sangmuah has a 90¢ target price.
Nine drill rigs are on-site and Koimtsidis expects to upgrade the resource estimate in September. “Guys like Nana have made their estimates, and we just hope we can embarrass them and make them look like they were conservative,” he jokes.
In May, Cardinal released assay results from stepout and down-dip extension drilling that shows mineralization extends 200 metres to 300 metres beneath the resource. Highlights include 17 metres grading 1.75 grams gold in hole 63 and 34 metres averaging 3.58 grams gold in hole 67.
The Namdini deposit is hosted along a regional scale shear zone near the Youga and Shaanxi gold mining operations. The gold mineralization is characterized by disseminated sulphides in sheared Birimian greenstones (metavolcanics intruded by granite and diorite).
Cardinal was granted a large-scale mining licence over 19.5 sq. km in Ghana’s Upper East Region, which includes Namdini. The mining lease is good for 15 years and is renewable.
Koimtsidis has been visiting northern Ghana with a small team of geologists for the last 15 years. Before setting up Cardinal Resources in 2011 with his cofounder, Malik Easah, Koimtsidis had worked in Ghana for PMI Gold as the company’s deputy country manager. Asanko Gold (TSX: AKG; NYSE-MKT: AKG) acquired PMI Gold in late 2013.
“This is not a job for me,” Koimstidis says. “We put $2 million into this before listing on the ASX. We are not in it as employees. We are in it as guys trying to build a business and make value, not just for ourselves and our shareholders, but for the community at large. We are entrenched in the local community and every level of government, and we want to make sure this becomes their first mine in northern Ghana.
“I’m not an arm-waving kind of guy,” he continues. “We’re looking for gold and we found gold. Where to from here? Where are the boundaries? How big is it? How do you make money out of it? That’s what it’s all about.”
The top-40 shareholders own 87% of the company. Cardinal’s major shareholders include 1832 Asset Management L.P. Dynamic Fund (10.35%); Van Eck Associates Corp. (7.28%); Gold Fields (NYSE: GFI) (6.98%); Commonwealth Bank of Australia (5.01%); Royal Bank of Canada (5%); Sprott Asset Management LP (4.98%); US Global (4%); Macquarie Bank (3.64%) and Precious Capital Global Mining and Metals Fund (3%). Directors hold 4.80%.
When is the namdini gold mine coming to reality.