VANCOUVER — Vancouver-based explorer Roxgold continues to advance its Yaramoko gold project in Burkina Faso, West Africa, despite lingering questions stemming from an unresolved proxy battle with a group of prominent shareholders. The company released an exploration update and inaugural gold resource on Aug. 7, which continues to highlight Yaramoko’s strong grades, though a quick turnaround in the resource drill program limited the deposit size.
Roxgold’s main success could be hitting the ground running with an early stage indicated resource that looks promising, especially in regards to grades. The 55 zone hosts 617,000 indicated tonnes grading 17.8 g/t Au for 354,000 contained oz, as well as 1.2 million inferred tonnes averaging 7.7 g/t for 306,000 contained oz.
Roxgold focused its delineation activities on Yaramoko's 55 zone — a gold target discovered in early 2011 — in hopes of fast-tracking a resource estimate and establishing the deposit’s economic potential. The company included 128 holes over 32,000 metres in its maiden resource estimate, completing early stage delineation in just nine months following the 55 zone's discovery.
“The receipt of this high grade gold resource estimate marks a turning point for Roxgold,” stated president and CEO Robert Sibthorpe. “It validates the strong financial support provided by our shareholders over the past year. This support has enabled us to rapidly establish the initial resource estimate. Roxgold can now move forward with plans to acquire the personnel and assets appropriate for an advanced exploration company approaching the development stage.”
According to lead director Allan Fabbro, the company is particularly pleased with the ratio of indicated to inferred resources, as well as the fact the bulk of the resource estimate is located within 250 metres of surface and remains open at depth,
“The exploration team both in Canada and Burkina Faso deserve recognition,” Fabbro commented. “Both for the discovery of the 55 zone in early 2011 and the three subsequent efficient drill campaigns which delineated the resource received today. Their work will allow us to go forward now with a promising asset and a strong treasury.”
Drilling to date has established an east-west surface strike of roughly 800 metres at the 55 zone, which has also extended to depths up to 250 metres without any significant loss in gold grade or true widths. Roxgold continues to run six drills at Yaramoko in a bid to expand the existing resource in anticipation of an upcoming economic assessment. The company expects to complete an additional 30 holes at the 55 zone over the next two months.
In addition to ongoing exploration at the 55 zone, Roxgold has completed 4,000 metres of reverse circulation drilling at its 109 zone and 117 zone, and expects assays on the program in the next few months. Work is also ongoing at the Bagassi South target, which lies 3 km south of the 55 zone, with 375 soil samples and 4,000 metres of drilling underway in 2012.
Roxgold's loss in value has been mirrored amongst numerous junior gold explorers, as volatile markets and constricting financing options have driven down share prices. The company has lost 71% or $1.55 per share since its last major exploration update on April 20. Roxgold looks to be in a solid cash position with US$27 million on hand as of July 16, and a fully diluted position valued at US$48 million.
The company's inaugural resource estimate at Yaramoko did little to soothe investor sentiment, as shares dropped an additional 17% or 9¢ en route to a 45¢ press time close.
Dissident investors led by Oliver Lennox-King have criticized Roxgold for not handling the development of its West African gold package in a way that best serves the interests of shareholders, and pushing out a quick resource update at higher grades will most likely not do much to alleviate those concerns in the short term.
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