RESOURCE STOCKS

Cardinal's golden tunes

Despite the incredible number of gold hits at Cardinal Resources’ (ASX: CDV) Namdini project, it could be overshadowed by the increasingly promising Kungongo prospect, also in northern Ghana. Ngaire McDiarmid reports

Ngaire McDiarmid
Cardinal's golden tunes

This gold-focused exploration and development company currently counts five major global institutions as cornerstone investors, thanks to the excitement being generated by its Namdini gold project in northern Ghana.

Cardinal Resources managing director Archie Koimtsidis is expected to be announcing an exploration target at Namdini in September 2016 and is quick to point out the drill rigs are still spinning.

In the first six months of 2016, Cardinal reported a growing number of wide mineralisation and visible gold hits at Namdini, with the most recent step out diamond drilling extending a 200m wide gold zone to a vertical depth of 290m.

Koimtsidis says Namdini’s potential to host a world-class gold project continues to be confirmed by the intersection of long mineralised zones, including 54m at 2g/t gold.

This potential has been recognised by cornerstone investors such as US Global Investors, Macquarie Bank, Canada’s Dynamic Fund and more recently, Switzerland’s Precious Capital Global Mining and Metals Fund and Australia’s long term award winning Colonial First State.

“These cornerstone investors can see the team is right and the project’s right,” Koimtsidis said, emphasising the significance during a meeting with Mining Journal in Perth.

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“They’ve each made a significant investment, pre-resource. 

“That’s key – it’s not common in the current market to have those kinds of cornerstone investors in pre-resource juniors.”

The Namdini project lies 6km south of the producing Shaanxi gold mine near Bolgatanga in northern Ghana.

Namdini has a current strike length of about 900m and four drill rigs were at work in the June quarter, drilling 41 holes and generating more than 11,000 samples.

Cardinal has split its core submissions between SGS Laboratories in Burkina Faso and Ghana to accelerate the receipt of assay results.

Once all the results are received, the drill data will form the basis for Cardinal to provide guidance on an exploration target, which Koimtsidis expected to report in the September quarter.

But Koimtsidis said Cardinal would not sit back and become a desktop company in the coming months, just awaiting the backlog of assay results.

“Firstly, we will be working on getting Namdini to a JORC resource, then a bankable feasibility study on the existing orebody,” he said.

“Whilst working on JORC resource and bankable feasibility study, we’ll be drilling along strike to the north and south at Namdini, and we’ll also be drilling on our other projects, so we can add to the volumes and ounces that Namdini has.

“So we’ll be drilling in the background as usual, spinning out results because of the sheer size and prospectivity of the package.”

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Namdini is one of four tenements in Cardinal’s 100%-owned Bolgatanga project totalling almost 800sqkm in northern Ghana, along with the Ndongo, Bongo and Kungongo prospects.

To the south, Cardinal has the 64sqkm Subranum project, 240km north-west of the capital Accra.

Koimtsidis said there were promising targets throughout all the tenements and the company had to decide how aggressively it would explore them, while also increasing confidence through further drilling at Namdini.

“It’s looking like we’ve got gold targets out there, so you’ve got to say to yourself: ‘do we tiptoe around the tulips or grab the bull by the horns?’.

“Geophysical data is providing us with more confidence so it looks like we may have to bring in several rigs again and start drilling.”

Koimtsidis believes the Kungongo prospect, west of Namdini, could be the first cab off the rank in terms of fresh drilling.

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“We’ve completed some geophysical work and the preliminary data is quite exciting,” he said.

“We’ve identified potential gold bearing targets over a distance of 6km.

“It’s huge, but it’s also great challenge to have.”

An airborne geophysical survey over Kungongo delineated two target areas, and the recent Gradient Array Induced Polarisation and ground geophysical surveys delineated the targets along the 6km zone.

After Kungongo, Koimtsidis said Ndongo could be the second area for regional exploration, while Bongo needed further work on developing drill targets and it was also a matter of getting south to Subranum to better evaluate the previously discovered gold mineralisation in its 5km strike length.

Koimtsidis is confident about Kungongo’s prospectivity, playing down the certainty of Namdini being Cardinal’s company-making project.

“Let’s see what Kungongo brings in over the next 3 to 6 months,” he said.

“Namdini definitely has to be tested along strike but Kungongo may surprise us all because of its sheer size.”

“We’re going into a phase of studies for Namdini,” Koimtsidis said.

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“We need to understand what we have within the existing ore body, and we’re planning a large exploration program around it as well as on the other prospective ground we have. 

“When gold went out of flavour four or five years ago, we went out and bought another rig and we’re one of the few gold explorers that has not stopped working.

“We haven’t stopped drilling and exploring and being well supported by our shareholders, because we actually have gold in the ground and it’s now all coming together for open cut mining.

“Gold has just begun swinging back in our favour but we wouldn’t have changed anything we are doing on the ground and corporately.”

Koimtsidis said the company had strengthened its board in the past year and also appointed Dr Julian Barnes as the project’s technical manager, to take Namdini through to a bankable feasibility study.

Dr Barnes has 34 years of experience in more than 52 countries in a variety of commodities, and over 25 years’ experience in due diligence studies for major global resource lending institutions and mining companies.

“His skills will be invaluable in progressing the company’s objectives,” Koimtsidis said.

Chairman Mark Connelly, who joined the board late in 2015, has extensive experience in developing and operating projects in West Africa, Australia, North America and Europe.

“We’ve got the right mix of people on the board and management, who have the experience to take this right through to production, as a well-rounded team,” Koimtsidis said.

“We have a strong presence in Ghana assessing drilling results on a daily basis, and I’ll be spending more of my time in Perth to progress the plan of having a bankable feasibility study completed within the 2 year timeframe we have set.

“We could complete a bankable feasibility study for Namdini within two years and that potentially could put us into development in late 2018.

“Meanwhile, the drills will keep spinning 24/7 and results will just keep on flowing!”

Cardinal Resources – At a glance

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HEAD OFFICE: Level 1, 115 Cambridge St, West Leederville WA 6007. Ph: +61 8 9322 6600. Fax: +61 8 9322 6610

Email: info@cardinalresources.com.au

Web: www.cardinalresources.com.au

DIRECTORS: Mark Connelly, Archie Koimtsidis, Malik Easah, Mark Thomas, Simon Jackson

QUOTED SHARES ON ISSUE: 297.1 million

MAJOR SHAREHOLDERS: 1832 Asset Management LP (Dynamic Fund) (8.5%), Precious Metals Fund (5.5%), Macquarie Bank (4.2%), US Global (3.9%), Colonial First State (3%)

 

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