Still lots to learn around Tasiast

With Kinross Gold’s (K-T, KGC-N) Tasiast project generating some negative headlines lately – to say nothing of the negative momentum of its share price – investors may be thinking that the shine is off the Tasiast gold project and gold mining in general within the West African country of Mauritania.

As of September 2011, Kinross was carrying Tasiast at a book value of $7.1 billion, with $4.6 billion of that amount being composed of goodwill.

A goodwill asset is generated by the difference in price between what the target company was carrying the asset at, and what the acquiring company paid for it. Rather than being depreciated as property plant and equipment assets are, goodwill is tested regularly for impairment. If the carrying value of the asset is greater than the current fair value of the asset, than a non-cash write-down must follow.

But the write-down wasn’t the only bit of news putting investors off. Kinross also announced a second delay on getting its feasibility study on the project done because it says it wants to further investigate the possibility of heap leaching more ore.

But getting lost in all that bad news is the fact that Tasiast remains a world class deposit with roughly 21 million ounces of gold in the ground when prove and probable reserves, measured and indicated resources and inferred resources are summed together. And, importantly for investors looking for early stage exploration plays, the project sits in a very under-explored greenstone belt in northwest Mauritania.

One company that has a head-start on finding out what may lie outside of Kinross’ property boundaries is Gryphon Minerals (GRY-A).

The Perth-based company has a 100% stake in the Tijirit Gold project, which lies just to the southeast of Tasiast.

Sitting roughly 300-km from the capital of Nouakchott and stretching out over 1,460 sq. km the site has seen limited historical drilling by the previous owner. The program returned highlight assays of 6 metres grading 17.63 grams gold from a depth of 10 metres; 6 metres grading 10.47 grams gold from a depth of 16 metres and 2 metres grading 24.90 grams gold from a depth of 56 metres.

Gryphon launched its own exploration program in 2011 and completed airborne aeromagnetic studies and then did a small 10 hole, diamond drill program to get a better handle on the geological structure beneath the weathered horizon.

Those studies help generate its first targets, and now the company has launched a 30,000 metre reverse circulation (RC) program. Investors can expect assay results over the course of the year.

Another company poking holes in the area around Tasiast is fellow Perth-based explorer Drake Resources (DRK-A).

The company owns the Tasiast South Project, which as the name suggests, is located directly south and southwest of Tasiast proper.

Drake believes that both the Tasiast and Tijirit greenstone belts may continue in a southerly direction and extend on to its property.

Past drilling on the Tasiast belt to the south of the Tasiast mine site has returned some promising results that could point to a southern extension. The nearest hole to Drake’s property was drilled roughly 20-km north of the property boundary and returned 2.4 metres grading 3.3 grams gold and 12 metres grading 0.7 grams gold.

Drake flew an airborne magnetic and radiometric survey over the 655 sq. km property in 2011 and results suggested that up to 100-km of prospective greenstone belt underlies its permits.

The company recently began an air core drill program that will see 17,000 metres of drilling done (air core drilling is similar to RC drilling, but doesn’t go as deep as RC rigs and is used for weathered rather than fresh rock). After the air core rigs are done, RC rigs will move in to cut 5,000 metres of rock.

The company had roughly $4.5 million in cash as of its last financial report in June of last year, and raised another $7 million in the second half of the year. Drake has 61 million shares outstanding and its share price has moved between A$.23 and A$.28 for the month of January.

Gryphon Minerals has 300 million shares outstanding and its share price has moved between A$1.17 and A$1.35 for the month of January.