No Moto? No Problem: Red Back Eyes Organic Growth In Africa

These are good days for Red Back Mining (RBI-T, RBIFF-O) in the West African country of Mauritania.

The company announced stellar drill results from its Tasiast gold mine in the country at the same time that the government of Mauritania issued key permits for the expansion of its gold production plant.

The company reported the results of 30 holes that all intersected between 1.38 grams gold and 5.16 grams gold, at depths between 87 metres and 290 metres.

Highlight intercepts include: 92.7 metres at 2 grams gold, 25 metres grading 3.44 grams, 84 metres of 2.89 grams gold, and 87 metres of 2.16 grams gold.

All of those results come from separate holes and the company says all intersections approximate true widths. The holes were drilled downdip and along strike from previously drilled holes.

With the latest results, Red Back has now intersected mineralization 200 metres south of the previously delineated deposit — extending the strike length to 550 metres.

It is continuing to drill south along strike and will also begin to test the area along strike and to the north of the known mineralization in the near future.

“Only a small portion of the extensive greenstone belt controlled by the company has been tested to date,” Red Back’s president and chief executive Richard Clark said in a statement.

But the Vancouver-based company plans to get to know the belt more intimately in the coming months.

It currently has four rigs onsite doing infill and extension drilling on the known mineralized zone, while another two rigs carry out drilling on exploration targets within 30 km of the plant.

In all, the company plans to spend $13 million on exploration in the second half of the year and expects to complete a new resource estimate that incorporates the latest results in September.

On the operations side of things, the news was good as well.

Red Back received government approval for a commercial dump leach operation and for a new tailings storage facility.

It says that the first three dumps — which hold roughly 2 million tonnes of ore — are now under irrigation.

With the approval of the tailings dam, expansion is now being ramped up to full commercial production, targeting 2.5 million tonnes per year.

Beyond Tasiast, the unhedged Red Back owns the Chirano gold mine in Ghana, where it is also drilling to add to its reserves and working towards the completion of a major plant expansion.

In Toronto, the company’s shares recently traded at $11.92.

Red Back, part of the Lundin Group of companies, has 230 million shares outstanding. Its shares have performed well since it withdrew its bid for Congo gold explorer Moto Goldmines (MGL-T, MTOGF-O) in light of a richer bid from Randgold Resources (GOLD-Q, RRS-L).