Roxgold’s Burkina Faso find attracts artisanal miners (March 21, 2011)

Roxgold (ROG-V) has released high-grade drill results from a new gold zone at its recently optioned Yaramoko gold project in Burkina Faso, adjoining the southern boundary of Semafo‘s (SMF-T) Mana gold mine.

Significant assays from a 33-hole, 2,723-metre drill program at the property include 6 metres grading 24.62 grams gold per tonne and two metres grading 70.5 grams gold. Assays for 19 of the holes are pending. The company says its discovery has triggered a gold rush of local artisanal miners, an unknown number of whom have since flocked to the site.

Roxgold can earn a 60% interest in Yaramoko and two other gold properties from fellow Burkina Faso gold explorer Riverstone Resources (RVS-V). A private company co-founded by Roxgold’s new president, Robert Sibthorpe, sold the option to Roxgold last fall for 5.62 million shares. Concurrent with the acquisition, Roxgold appointed Sibthorpe president and Al Fabbro as a director. Sibthorpe, a geologist and former Yorkton Securities analyst, received 750,000 of the shares while Fabbro, a former Canaccord Capital broker, received 650,000 shares. 

The two men are part of a Vancouver-based group called White Label Corporate Services (formerly the Hamilton Resource Group), which manages a small stable of companies listed on the TSX Venture Exchange. After Roxgold released its latest set of drill results, the stock jumped 21.5¢ to 44.5¢ on 16.6 million shares, making it the most expensive stock of White Label’s five-member group. (The others are Alto Ventures (ATV-V), which is exploring for gold in Ontario; Brazilian Diamonds (BZD-V), which sold off its only diamond property last year and rolled back its shares 1-to-3 last month; Midnight Sun Mining (MMA-V), which is looking for a new property after a small but unsuccessful exploration program last year on its only property, Arn, in the Yukon, where drilling turned up no significant gold mineralization; and finally, Forum Uranium (FDC-V), which is drilling for uranium in Saskatchewan with joint-venture partner Hathor Exploration (HAT-V), and for uranium and rare earth elements in Nunavut.)

Roxgold is now completing 2,500 metres of drilling on the second Riverstone property, Bissa West, where sampling returned grades up to 19 grams gold per tonne amid widespread artisanal workings. Bissa West was also explored by Swedish zinc-copper producer Boliden (BLS-T) in the late 1990s using modern exploration methods such as drilling. After Bissa West, Roxgold will move the drill rig to a third property, Solna, which is also home to historical artisanal workings but has seen very little modern exploration. The company will drill 2,500 metres there to test up to 10 different artisanal gold mining zones, as well as two other areas of interest. 

Riverstone is no stranger to Burkina Faso and its many artisanal miners. In April 2009, locals gathered around a section of Riverstone’s main Karma project and began digging up several near-surface gold veins. Sure enough, up to 7,000 of these miners arrived over the next several months, digging hundreds of shafts on an area the company calls Nami. In early 2010, news of the artisanal mining helped push Riverstone’s stock up to $1 from 25¢, with analysts such as the Gold Newsletter’s Brien Lundin describing Nami as “a gold rush in full bloom,” complete with cellphone and phonecard vendors to boot. Drill results from Nami, though significant, were not as exceptional as some speculators had hoped, prompting the stock’s eventual slide down to 50¢.