Azumah Acquires 69,000oz High-Grade Julie West Project Wa Gold Project, Ghana

Transcription

1 ASX & Media Release ASX Code AZM 27 th April 2016 Azumah Acquires 69,000oz High- Julie West Project Wa Gold Project, Ghana 69,000oz, 4.4 resource acquired for consideration of 7M Azumah shares 146km 2 PL creates unrivaled landholding in Ghana s Upper West Likely to boost present 2.0Moz Mineral Resource and 624,000oz Ore Reserve Investment Highlights: Wa Gold Project: Feasibility Study Completed 2.0Moz Mineral Resource including 1.3Moz Measured & Indicated 624,000oz Ore Reserves at 2.14 g/t plus 28,500oz mining inventory Initial 7yr mine-life at +/- 90,000oz pa Excellent Infrastructure (grid power, water, established roads, airport) Mining Leases granted Exploration licenses of 2,400km 2 with >150km strike of prospective Birimian terrain % strategic investment in neighbour, Castle Minerals Limited (~10,000km 2 ) Board and management team of successful explorers, mining and corporate professionals Issued Capital: 439.7M ordinary shares 17.20M performance rights 2.0M $1.00 Converting Notes Directors & Management: Chairman: Michael Atkins Managing Director: Stephen Stone Non-Executive Directors: Geoff M Jones Bill LeClair Company Secretary: Dennis Wilkins Contact: Stephen Stone Mb: +61 (0) stone@azumahresources.com.au Immediately along strike of Azumah s 834,000oz Julie Mineral Resource Highly-prospective, under-explored and with immediate new targets Will strengthen Project financing and development case The acquisition of Julie West will add important high-grade resource ounces and boost the mining inventory of the Wa Gold Project. Azumah Managing Director, Stephen Stone said. The 146km 2 Julie West PL is underexplored with several targets already earmarked for evaluation which with the recent Manwe discovery by Azumah highlights the region s excellent prospectivity. The Julie West deposits will be integrated into Azumah s advanced plans for the development of the initial seven-year, 90,000oz per year Project for which a 2.0Moz Mineral Resource has been delineated, a 652,000oz Mining Inventory confirmed, a Feasibility Study completed and Mining Leases granted (including for the Julie deposit) with most key infrastructure including grid power in place Ghana focused gold explorer and developer Azumah Resources Limited (ASX:AZM) ( Azumah or the Company ) is pleased to advise that it has acquired the high-grade 69,000oz Julie West project adding valuable inventory that strengthens the prospects for development of its Wa Gold Project ( Project ) and provides Azumah with an unrivalled landholding in Ghana s Upper West region. The 100% owned Julie West Prospecting Licence is adjacent to Azumah s own 834,000oz Julie deposit and hosts the high-grade 56,200oz Julie West prospect (415,000t at 4.2) and the 12,800oz Danyawu prospect (72,100t at 5.5g/t Au), 2km to the north west. It was originally part of the extensive Ghana licence holdings of Castle Minerals Limited ( Castle )(Figures 1 to 5). Page 1 of 8

2 Figure 1: Julie West and Azumah s Wa East Licences These prospects will be integrated into Azumah s advanced plans for the development of the initial sevenyear, 90,000oz per year Project for which a 2.0Moz Mineral Resource has already been delineated, a 652,000oz Mining Inventory confirmed, a Feasibility Study completed, Mining Licences granted (including for the Julie deposit) and for which most key infrastructure including grid power is in place. GR Engineering Services Limited will shortly complete a formal review of the establishment capital costs for the Project which is anticipated to see a material lowering of the required development funding. Azumah s discussions with mainstream project financiers and also with several possible corporate partners are progressing well. These have been assisted by the recent firming of the gold price and the improved market sentiment towards gold developers and producers. Transaction details The right to acquire Julie West was sold by Castle to Bunda Resources Pty Ltd ( Bunda ) (refer ASX:CDT release dated 28 September 2015) under a Put Option and Sale agreement between Bunda, Castle and its local subsidiary, Carlie Mining Limited ( Carlie ). Bunda made a non-refundable A$250,000 cash payment and agreed an additional A$250,000 cash payment upon licence transfer plus a 4% net smelter return royalty. Bunda has now assigned the rights and obligations to Azumah (and its wholly owned Ghana subsidiary Phoenix Resources Limited Phoenix ) for a consideration and immediate issue of 7 million Azumah ordinary shares. These shares will be the subject of a six-month sale restriction agreement. Castle has consented to the transfer and agreed to extend the time to transfer the Julie West PL to Azumah by twelve months. Page 2 of 8

3 Figure 2: Julie and Julie West Geology (after Castle Minerals Limited) Licencing The Julie West PL was first granted in June 2010 to Newmont Ghana Gold Limited ( NGGL ). Carlie acquired the licence from NGGL in 2013 and whilst shown on government tenure maps as the owner, formal documentation is still being processed. Resources The Julie West resource is located 4.5km west and along strike of Azumah s existing Julie deposit in the Wa East region of the Wa Gold Project and for which a Mining Lease has already been issued by the Ghana Government. Julie West, Danyawu and the low-grade Koda mineralisation are proximal to the regionally important and prospective Baayiri fault which transcends the Julie West PL for ~8km. The additional resources at Julie West will increase overall resources at Wa East to ~1.0Moz and to 50% of Azumah s total Mineral Resources. The Castle resource estimates for Julie West (completed by Runge Limited -- refer ASX:CDT release dated 14 April 2009) and for Danyawu (completed by RungePinockMinarco Limited - refer ASX:CDT release dated 7 March 2013) are JORC 2004 compliant. Azumah will re-estimate resources to JORC 2012 compliance. The historical estimates prepared under the former JORC Code 2004 are set out in the table below: Cut off 1g/t Indicated Inferred Total Gold Gold Gold (Mt) () (oz) (Mt) () (oz) (Mt) () (oz) Julie West 383, ,100 32, , , ,200 Danyawu 72, ,800 72, ,800 Total 455, ,900 32, , , ,000 Values have been rounded Page 3 of 8

4 The reported historical estimates are not reported in accordance with the current JORC Code. A competent person had not done sufficient work to classify the historical estimates as mineral resources in accordance with the current JORC Code and it is uncertain that following evaluation and/or further evaluation work that the historical estimates will be reported as mineral resources in accordance with the JORC Code. However, having reviewed the information upon which the historical estimates have been made Azumah has formed the view that the estimates are reliable and representative of the resources it expects to be reported under the JORC Code when Azumah completes work to bring the deposit into compliance. Figure 3: Julie West Cross-Section (after Castle Minerals Limited) Figure 4: Julie West Cross-Section (after Castle Minerals Limited) Page 4 of 8

5 Exploration History Consecutive phases of exploration by holders of the area comprising the Julie West PL has consisted of conventional soil sampling (various), BLEG sampling (NGGL) and three phases of RC drilling (Castle). Azumah has access to all of this data and several other regional remote sensing datasets. The Julie West prospect comprises a single, high-grade, usually outcropping quartz vein extending northwest to southeast over 560m and dipping The vein ranges between 1m to 9m thick with an average true thickness of 3.5m and is hosted in generally barren granodiorite. Gold mineralisation at Danyawu is similar to Julie West with the primary vein varying in thickness from 1m to 16m with an average true thickness of approximately 8m and extending for 110m. Julie West and Danyawu remain open at depth. At Koda Hill, a Castle RC drilling programme identified lower grade mineralisation within an altered and quartz veined porphyry that has intruded sediments. A number of wide quartz veins have also been identified at Alpha, Bravo and Charlie, 1,500m to the southwest of Julie West but these have not been adequately tested. Several other areas of gold anomalism also require investigation. Castle Mining Study Castle undertook a study for a heap leach operation at Julie West and subsequently submitted a Mining Lease application. Mineralogical and metallurgical extraction studies by Castle included gravity and column leaching test work at the laboratories of AMMTEC, Perth. Azumah does not intend to pursue a stand-alone heap leach option and will instead integrate Julie West into its broader plans for a conventional CIL recovery operation based at Kunche. Proposed Work A work programme has been developed for the Julie West PL which includes: Review and incorporation of all exploration datasets, geology and regolith mapping plus reconnaissance auger sampling to comprehensively evaluate the entire licence with closer-spaced auger sampling in vicinity of any anomalous auger samples obtained in order to define new RC drill targets; Update of the current resource estimates to JORC 2012 compliance; Technical studies to determine the impact of JORC 2012 Mineral Resources on overall Project Ore Reserves and economics; and Application to MINCOM for the transfer of the Julie West PL direct to Phoenix and incorporation of Julie West and Danyawu into an extended Julie Mining Lease. For further information on Azumah Resources Limited and its Wa Gold Project please visit its website at Stephen Stone Managing Director Tel: +61 (0) stone@azumahresources.com.au Page 5 of 8

6 Figure 5: Wa Gold Project Key Deposits and Prospects About Azumah Azumah Resources Limited is a Perth-based, ASX-listed (ASX: AZM) company focused on exploring and developing its Wa Gold Project in the Upper Region of Ghana, West Africa. Three main deposits have been discovered and extensively drilled at Kunche and Bepkong, adjacent to the Black Volta River and Ghana s border with Burkina Faso, and at Julie ~80km to the east. Several satellite deposits, including Aduane and Collette, have also been delineated. To date the Company has defined a JORC Mineral Resource of 2.0Moz of gold grading 1.5 including 1.3Moz Measured and Indicated grading 1.6g/t gold with these evenly distributed between Kunche-Bepkong and Wa East (Julie). Page 6 of 8

7 Mineral Resources have grown progressively through systematic exploration of the Company s 2,400km 2 licence holdings which encompass large tracts of prospective Birimian terrain, the rocks that host the majority of West Africa s gold mines. Azumah anticipates Mineral Resources will continue to grow through the systematic testing of its pipeline of specific targets, prospects and many areas of interest. Azumah has recently completed a Feasibility Study for a mining operation based on an initial seven-year life and producing ~90,000oz Au per year from the open pit mining and treatment of ore through a nominal 1.2 million tonnes per year carbon-in-leach (CIL) processing plant (1.8Mtpa treating softer oxide material). The plant will be located adjacent to the Kunche deposit and incorporate a flotation and regrind circuit to treat Julie primary and some transitional ore which will be hauled by road to the processing plant. A JORC Ore Reserve of 624,000oz Au (9.1Mt at 2.14) has been defined based on recent studies. With the addition of Inferred mineralisation contained in designed and optimised pits the total Mining Inventory is 652,500oz gold. Extensive metallurgical test work has been undertaken to confirm a high average overall gold recovery of ~92% for the Kunche, Bepkong and Julie deposits. Azumah has had two 15-year Mining Leases granted over its key deposits (Ghana government holds a 10% free carried interest in their rights and obligations and is also entitled to a 5% gross gold royalty) and is now moving to obtain environmental operating permits necessary to allow development to proceed. No technical, social or environmental impediments to development have been identified and there is strong support from stakeholders for the Project. Whilst the region has no other major industry, the Project benefits from excellent regional infrastructure including grid power to site, good quality bituminised and non-bituminised roads, good access to water, a sealed airstrip at the regional centre of Wa and good general communications. Azumah holds a 19.99% interest in its neighbour and junior Ghana explorer, Castle Minerals NL which has ~10,000km 2 of licences adjacent to Azumah. Azumah has also assumed management responsibility for Castle. (As at August 2014) Table 1: Ore Reserves Summary - August 2014 Tonne s (Mt) Ore Reserves Summary Proved Probable Total Gold To Mill (Mt) (Mt) Oz Au Kunche ,000 Bepkong ,000 Julie ,000 Total ,000 Values have been rounded NB: The Ore Reserve excludes 28,000oz inferred gold deemed Mining Inventory Page 7 of 8

8 Table 2: Mineral Resource Estimate - August 2014 Cut-off Measured Indicated Inferred Total 0.5 (M) Gold Oz (M) Gold Oz (M) Gold Oz (M) Kunche , , , ,000 Bepkong , , , ,000 Aduane , ,000 Julie , , , ,000 Collette , ,000 Total , , , ,994,000 Values have been rounded.. The Julie West resource has not been included Competent Persons Statements The scientific and technical information in this report that relates to the geology of the deposits and exploration results is based on information compiled by Mr Stephen Stone, who is a full-time employee (Managing Director) of Azumah Resources Ltd. Mr Stone is a Member of the Australian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Stone is the Qualified Person overseeing Azumah s exploration projects and has reviewed and approved the disclosure of all scientific or technical information contained in this announcement that relates to the geology of the deposits and exploration results. The scientific and technical information in this report that relates to the in-situ Mineral Resource estimates for the Bepkong and Collette deposits is based on information compiled by Mr David Williams, who is a geological consultant employed by CSA Global Pty Ltd. Mr Williams is a Member of the Australian Institute of Geoscientists and the Australian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Williams has reviewed and approved the disclosure of all scientific or technical information contained in this announcement that relates to the Bepkong and Collette Mineral Resource estimate. The scientific and technical information in this report that relates to the in-situ Mineral Resource estimates for the Kunche and Aduane deposits is based on information compiled by Mr Dmitry Pertel, who a full-time employee (Manager - Resources) of CSA Global Pty Ltd. Mr Pertel is a Member of the Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Pertel has reviewed and approved the disclosure of the relevant scientific or technical information contained in this announcement that relates to the Kunche and Aduane Mineral Resource estimates. The scientific and technical information in this report that relates to Mineral Resources estimates for the Julie deposit is based on information compiled by Mr Brian Wolfe, a Competent Person who is a Member of the Australian Institute of Geoscientists. Mr Wolfe is a consultant to Azumah Resources Limited and is not an employee of the Company. Mr Wolfe has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Wolfe consents to the inclusion in the report of the Julie Mineral Resources in the form and context in which it appears. The scientific and technical information in this report that relates to Ore Reserves estimates for the Kunche, Bepkong and Julie deposits is based on information compiled by Mr Linton Kirk, an independent consultant to Azumah Resources Limited. Mr Kirk is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Kirk has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Kirk consents to the inclusion in the report of the matters related to the Ore Reserve estimate in the form and context in which it appears. The scientific and technical information in this report that relates to Process Metallurgy is based on information compiled by Mr Ian Thomas, an independent process consultant to Azumah Resources Limited. Mr Thomas is a member of the Australasian Institute of Mining and Metallurgy. Mr Thomas has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Thomas consents to the inclusion in the report of the matters related to the metallurgy, specifically the data represented in Table 3 in ASX release dated 2 nd September 2014, in the form and context in which it appears. Forward-Looking Statement This release contains forward-looking information. Such forward-looking information is often, but not always, identified by the use of words such as seek, anticipate, believe, plan, estimate, expect and intend, and statements that an event or result may, will, should, could, or might occur or be achieved, and other similar expressions. In providing the forward-looking information in this news release, the Company has made numerous assumptions regarding: (i) the accuracy of exploration results received to date; (ii) anticipated costs and expenses; (iii) that the results of the feasibility study continue to be positive; and (iv) that future exploration results are as anticipated. Management believes that these assumptions are reasonable. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking information. Forward-looking information is based on estimates and opinions of management at the date the statements are as anticipated. Management believes that these assumptions are reasonable. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking information. Forward-looking information is based on estimates and opinions of management at the date the statements are made. Gold Oz Page 8 of 8