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Avesoro Resources Inc (AUE)
Aureus Mining results impress analysts
By Darshini Shah | Tue, 12th March 2013 - 11:14
Aureus Mining (AUE) on Tuesday released the results of the first 47 holes from its 62-hole drill programme at the Weaju gold target in Liberia.
The programme is designed to test the grade and geological continuity of a mineralised system at the target, situated 30 kilometres north-east of the AIM-listed company's New Liberty gold project.
The results, which were mainly from shallow intercepts, included 7.5 metres at 10 grams per tonne (g/t) from 0.2 metres; nine metres at 6.6 g/t from 114.4 metres; and 11.3 metres at 4.6 g/t from 13.9 metres.
Current and historical drilling suggested approximately one kilometre of gold mineralisation open in all directions, while soil surveying suggested this could increase to two kilometres. Pitting and trenching were underway to define targets for drill testing in this additional strike length.
Assay results for the remaining 15 holes of the 9,000-metre programme are expected in April. These results cover the area between the Ridge and Main zones and the deeper extensions of the North zone and the Creek zone. Resource potential and the phase-two drilling will be assessed once all results have been received. Metallurgical sampling was also in progress.
"The drilling results are encouraging and underscore the exploration potential within Aureus Mining's Bea Mountain mining licence in Liberia, over and above the New Liberty asset," commented analysts at Investec.
Analysts at FoxDavies echoed this view, pointing out the drilling and soil also suggested the mineralisation was extensive over a two-kilometre strike length. "But as the company states, further work is required to test whether this hangs together as an economic project," they noted.
However, they added: "As the New Liberty project is so close, the barriers to bringing this into production are lower if ore can be trucked to New Liberty."
Interactive Investor view
Shares in Aureus Mining have lost almost a quarter of their value over the past three months and look relatively inexpensive.
Operationally, the New Liberty mine would establish Liberia's first commercial gold mine and provide a stepping stone from which to potentially develop other targets within the company's extensive exploration portfolio in the region. New Liberty is expected to produce around 115,000 ounces per annum of gold at $685 (£461) per ounce over an eight-and-a-half year mine life.
New Liberty benefits from a high grade of more than three g/t gold, which allows for a meaningful production base at relatively low capital cost. The asset also opens up the potential to advance other discoveries in the region.
Despite its problematic recent history, Liberia appears to be making considerable progress and evolving into a reasonable jurisdiction in the region.