Cardinal aims to outperform peers

DUAL-listed Cardinal Resources (ASX/TSX:CDV) is aiming high in 2018 as its experienced management team continues to de-risk its flagship, large-scale Namdini openpit gold project in Ghana.

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The company expects a positive PEA for Namdini this quarter

Managing director and CEO Archie Koimtsidis said the company provided investors with exposure to potentially a world-class development gold asset, with the company de-risking and advancing the project towards development with an experienced management team with extensive in-country experience. 

“The company expects to continue to generate positive news flow from its infill drill campaign, metallurgical optimisation work, greenfield exploration assets and Preliminary Economic Assessment due in the first quarter of 2018,” he told RESOURCEStocks.

“Given the recently completed drill program at Namdini, growing mineral resources and expected positive PEA, the company believes it should outperform its peer group during 2018.”

Namdini’s indicated mineral resource has increased to 120 million tonnes grading 1.1g/t gold for 4.3 million ounces with an inferred mineral resource of 84Mt grading 1.2g/t for 3.1Moz at a 0.5g/t cut-off. 

Infill drilling has continued to point to the scope of the resource with recently produced high-grade gold results including 13m at 4.9g/t from surface and 9m at 4.1g/t from 414m.

“Recent grade control starter pit drilling results have been extremely positive and suggest a higher grade, low strip scenario could dramatically reduce the payback period for this large-scale development project,” Koimtsidis said.

Along with achieving the PEA this quarter, Cardinal will continue to release results from its ongoing infill drill programme that will lead to an updated mineral resource estimate.

“The company anticipates an upgrade in mineral resources and a well-defined starter pit, when the update is released,” Koimtsidis said.

Cardinal has already reached significant milestones – it has a mining license in hand for Namdini and filed an Environmental Impact Statement in August.

Koimtsidis said the EIS was tracking well and he anticipated permitting approvals by mid-year.

“As for production, it’s a bit early for us to place a timeframe on that but we can say that we will be very active in seeking out funding options once our PEA is reported to the market during Q1-2018,” he said.

Namdini is located in the Nangodi Greenstone Belt (NGB), where the main lithology in the belt are volcanic-sediment sequences of Birimian age (interbedded basic to intermediate flows, felsic tuffs and fine-grained sediments) overlying earlier sedimentary basins (greywackes and phyllites) of the Tarkwaian formation.  

Locally, the NGB trends north-northeast to south-southwest over 30km and diverts to an east-northeast to south-southwest trend in the south of the area around Namdini.

In all rock types, mineralisation is associated with disseminated sulphides of pyrite and minor arsenopyrite, in both the veins and wall rocks. The mineralised zones are visually distinctive due to the presence of millimetre to centimetre wide quartz-carbonate veins that are commonly folded and contain yellow-brown sericite-carbonate selvedges. 

Cardinal likes the lay of the land and recently extended its portfolio by agreeing to acquire two prospecting licenses in northeast Ghana from a Kinross Gold Corp subsidiary.

The Kinross tenements are located along the Nangodi shear, and contain the historic Nangodi gold mine, which produced 18,620oz at 24.54g/t during the 1930s, Koimtsidis explained.

“The consolidation of the acquired land package with Cardinal’s large scale Ndongo tenement, which is located on the same regional shear zone as the Namdini deposit, will allow Cardinal to progress its regional exploration programme,” Koimtsidis said.

“Early mapping and sampling shows similarities with Namdini, particularly in relation to alteration.”

Cardinal is busy implementing geophysical, structural, and large-scale soil sampling programs on its greenfields properties in Ghana.  

Preliminary work at Kungongo, about 45km west of Namdini, has identified a large-scale gold-in-soil anomaly measuring roughly 4.5km long by 300m wide.  

The company believes there is potential to delineate a resource from this indicative anomaly.

Cardinal’s two additional exploration properties located close to the Namdini deposit, Ndongo and Bongo, take the total land package in the Bolgatanga district to over 900km2.  

Cardinal had ongoing soil sampling and geophysics programmes running at Ndongo at the time of going to press.

On top of expanding its landholding and exploration activity, the company has broadened its investor base, adding a TSX listing in July 2017.

Six months on, Koimtsidis said the dual listing provided a broader awareness of the significant gold discovery that Namdini represents.

“The TSX listing has enhanced the company’s support by the North American and Australian investment communities,” he said.

“The TSX listing was timely given the substantial amount of activity being conducted to complete our PEA. 

“Further, North American investors have a very good understanding of the West African mining scene and with the listing on the TSX, it has provided the opportunity for the company to be compared with its North American peers also operating in West Africa.”

A clear indication of the support Cardinal is attracting is the C$12 million (US$9.6 million) bought deal financing announced in October, which will add to the near A$20 million (US$16 million) the company had in cash at the end of September.

Koimtsidis said there were several key reasons for attracting such strong support – namely the attractive jurisdiction, Cardinal management’s extensive in-country and mining experience and the project’s location advantages.

He said Ghana was home to several junior, intermediate and senior mining companies and had a long history of mining, plus a stable political system.

“Ghana has an established mining and tax regime in place that provides a clear framework for advancing projects,” he said.

“The company is led by a strong management and development team who have extensive experience in Ghana and other African countries.”

Koimtsidis splits his time between Ghana and the company’s head office in Perth, Western Australia, and the board members represent further in-country expertise, finance and mine discovery and development experience.

“The Namdini project location has a lot of attractive advantages from a development and infrastructure point of view, being located near water, power and sealed roads to air and sea ports,” Koimtsidis added. 

“Ghana also provides skilled labour through its extensive history of mining and the large number of operating mines in country.” 

As 2018 begins to unfold, Koimtsidis said investors could expect to see positive news flow from Cardinal’s ongoing drill campaign, metallurgical optimisation work, greenfield exploration results, a Preliminary Economic Assessment and Mineral Resource Update.

“More detailed studies will continue through 2018 with expected releases of exploration results, detailed metallurgy, engineering design work and PFS results,” he concluded.

Cardinal Resources – at a glance

HEAD OFFICE: Suite 1, 28 Ord Street, West Perth WA 6005

PH: +61 8 6558 0573

EMAIL: info@cardinalresources.com.au

WEB: www.cardinalresources.com.au

DIRECTORS: Kevin Tomlinson, Archie Koimtsidis, Malik Easah, Jacques McMullen, Michele Muscillo, Robert Schafer.

SHARES ON ISSUE: 371.4 million

MARKET CAP (at 18 January 2017): A$181.97 million

MAJOR SHAREHOLDERS: Gold Fields (Australia) 11.17%; Bank of Nova Scotia - Dynamic Fund (Canada) 9.77%; Van Eck Associates 7.49%; Royal Bank of Canada 7.08%; Sprott Asset Management 4.98%

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