Extended resource drilling and updated DEP

RNS Number : 2801T

Goldstone Resources Ltd

17 July 2020

 

17 July 2020

GOLDSTONE RESOURCES LIMITED

("GoldStone" or the "Company")

Extended resource drilling and updated DEP

GoldStone Resources Limited (AIM: GRL), the AIM quoted gold exploration and development company focused on bring its Akrokeri-Homase Gold Project ("AKHM") into production, announces that, in line with progress towards commencing production at the Homase South Pit and construction of the associated heap leach facility, the Company has planned an additional infill RC drilling programme with the objective to increase the mineable resource at depth at the Homase South Pit, which is expected to commence shortly.

The Homase South Pit, the first of the three open pits planned to be brought into production as detailed in the Definitive Economic Plan ("DEP") for its Akrokeri-Homase Gold Project ("AKHM") announced on 27 June 2019, extends 1,500 metres southwards from the historic Homase Main Pit, see Plan 1, which produced 52,500 oz gold at an average grade of 2.5g/t Au in 2002/03 by AngloGold Ashanti.

The proposed programme will seek to further define and extend the mineable resource down-dip at the Homase South Pit to a vertical depth of approximately 60 metres.  As defined in the DEP, the Homase South Pit is currently targeting the oxide resource to a vertical depth of 30 metres.  The programme will build on previous drilling completed by Goldstone in 2011-2012, which defined the Company's existing JORC resource, and which indicated increased grades in this area of 1.4g/t to 2.5g/t below the weathered zone of 30 metres.

The Company is also considering an additional drilling programme within the Homase Trend, extending northwards, by approximately 2,000 metres from the historic Homase Main Pit, encompassing the proposed Homase Central and North Pits, being the other two open pits defined in the DEP, see Plan 1, and the historical exploration pit, to the same depth of 60 metres, to further increase the mineable resource defined within the DEP.

Plan 1: Location plan of Proposed Mine

http://www.rns-pdf.londonstockexchange.com/rns/2801T_1-2020-7-16.pdf

The Board has also updated the financial model utilised for the DEP to bring it in line with the current gold price of approximately US$1,800/oz (versus US$1,300/oz used in the initial DEP) and to capture a reduced initial CAPEX of US$3.0m (versus US$6.9m in the DEP). As noted in the Company's announcement of 30 June 2020, this reduced initial CAPEX approach enables the Company to achieve first production within the timetable envisaged in the DEP whilst deferring certain elements of the project (including the elution plant, electrowinning and Gold Room) such that they can be funded from production cashflows. The combined effect of an increase in the gold price and the reduction in initial capital outlay is estimated by the Board to increase the originally estimated project NPV from US$19.5m to US$34.5m and the IRR from 143% to 382% (at a 10% discount rate and excluding financing costs).

As detailed in the announcement of 27 June 2019, the DEP encompasses three open pits along the Homase Trend together with tailings from the Akrokeri Mine.  The first of the three pits planned for production is the Homase South Pit, in respect of which the mining lease has been awarded.  Following completion of the recent funding and in line with the Company's reduced initial CAPEX development plan, the Board anticipates, subject to timely receipt of the requisite environmental and operational permits, that the first gold pour from the Homase South Pit will be achieved in Q4 2020.

Whilst the lease initially only relates to the Homase South Pit, the DEP has been approved by the relevant authorities in Ghana in its entirety and the lease can therefore be renewed and/or extended to include additional pits along the Homase Trend as the Company's production plans advance.

The Company continues to work closely with the Ghanaian Minerals Commission and the Environmental Protection Authority to finalise the environmental permit and the Board expects that the environmental and operational permits will be awarded in the next few weeks.  On receipt of the relevant permits, the Company will be in a position to immediately commence mining operations at the Homase South Pit, utilising contract mining, and construct the heap leach plant, with the target of achieving our first gold pour in Q4 2020.

Emma Priestley Chief Executive Officer commented:  

"The updated DEP, to reflect the current gold prices and our current development plan, demonstrates the attractiveness of the AKHM project. The potential to further expand the mineable resource through the planned additional drilling programmes also offers further potential upside though our ability to increase the minable resource. We continue to believe that AKHM has the ability to deliver significant value for all shareholders, and we look forward to keeping shareholders updated as we move forward to achieving first gold production in Q4 2020."

For further information, please contact:

GoldStone Resources Limited
Emma Priestley	Tel: [phone]
Strand Hanson Limited
Richard Tulloch / James Bellman	Tel: [phone]
SI Capital Limited
Nick Emerson	Tel: [phone]

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

About GoldStone Resources Limited

GoldStone Resources Limited (AIM: GRL) is an AIM quoted gold exploration and development company.

The Company is focused on developing the Akrokeri-Homase project in south-western Ghana, which hosts a JORC Code compliant 602,000 oz gold resource at an average grade of 1.77 g/t.  The existing resource is confined to a 4km zone of the Homase Trend, including Homase North, Homase Pit and Homase South.

The project hosts two former mines, the Akrokeri Ashanti Mine Ltd, which produced 75,000 oz gold at 24 g/t recovered grade in the early 1900s, and the Homase Pit which AngloGold Ashanti developed in 2002/03 producing 52,500 oz gold at 2.5 g/t recovered.  It is the Company's intention to build a portfolio of high-quality gold projects in Ghana, with a particular focus on the highly prospective Ashanti Gold Belt.

 

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