Newcore Gold hits above-reserve grade at Nyam deposit

Newcore Gold (TSXV: NCAU) has flagged potential for resource growth at its Enchi project in Ghana after encountering high-grade mineralization at depth from its ongoing 80,000-metre diamond drill program.

Earlier this week, the company announced that drilling at the Nyam gold deposit portion of the project returned results above the current reserve grade and below the limits of the pits that constrain the mineral reserves.

This was highlighted by an intercept of 3.51 grams per tonne (g/t) gold over 21 metres from 245 metres down, including a higher-grade interval of 5.91 g/t over 9 metres from 251 metres. Another hole intersected 1.61 g/t gold over 14 metres from 278 metres, including 2.94 g/t over 7 metres from 284 metres.

The drilling also tested the downdip and lateral extensions to high-grade gold mineralization previously identified at Nyam, with one hole returning 1.40 g/t gold over 21 metres from 317 metres, including 2.08 g/t over 11 metres from 319 metres.

"These holes successfully intersected gold mineralization below the reserve pits and in areas that have historically seen limited drilling," Greg Smith, VP Exploration of Newcore, stated in a news release. "As the third largest deposit currently defined at Enchi, Nyam remains open along strike and at depth, with this drilling continuing to support our interpretation that the mineralized system continues at depth."

The company currently has four drill rigs active at the site, as it works to define opportunities to add higher-grade gold into the early years of the mine plan while also expanding the mineralized footprint.

The Enchi project currently hosts a probable reserve totalling 51.3 million tonnes grading 0.64 g/t gold containing 1.05 million oz., included within an indicated resource of 83.6 million tonnes grading 0.56 g/t containing 1.5 million oz.

New PFS

Based on the reserves, Newcore recently released a new pre-feasibility study (PFS) on the project incorporating drilling and technical work completed in 2024 and 2025 but excluding results from the 2026 program.

The PFS gave the project an after-tax net present value (NPV) of US$496 million and an internal rate of return (IRR) of 37%, for a mine that is expected to have nine years of operation with average annual production of 104,000 oz.

The economics represented a drop-off compared to its preliminary economic assessment (PEA) published in 2024. According to Newcore, the new technical study used a modified mine plan centred around an open-pit operation using standard milling and carbon-in-leach processing, instead of a lower-capital, open-pit heap leach operation.

According to analysts at SCP Research, the PFS report provided "a good starting point" for the mine project, especially in its higher-grade years 1-3 (130,000 oz. a year at 0.8 g/t) through mining the Boin deposit, though it "understated the upside of the project over the life of mine."

"The reason is the mine plan is effectively the same shallow pits as the prior heap leach PEA but with higher grade Boin ounces brought up front. The opportunity and rationale for the CIL is to capture the upside for higher ounces at depth, but the drilling to bulk out the mine plan will occur over the next 10 months," they said in a research report.

With more drilling, SCP sees the potential to extend the mine life at the head grade, with a higher production profile of 130,000-140,000 oz. per annum.

Those at Haywood echoed the importance of exploration on the project's growth path, stating in a research note that "grade remains critical to project economics". Its analysts are encouraged by the latest results from the Nyam area. "We view this batch of assay results positively, which feature numerous intercepts with grades well above Nyam’s existing resource grade deeper in the system," they wrote.

Following the drill results, Haywood maintained its "Buy" rating on Newcore with a C$1.50 target price. "We expect share price performance to be driven by Newcore's ability to demonstrate the potential for a larger-scale operation than that envisioned in the PFS," they said.

By midday Thursday, Newcore Gold traded at C$0.34 apiece -- around a third of its 52-week high of $0.92 -- for a market capitalization of $103.2 million.