AMN - GHANA: Pinecrest evaluates Enchi options

Pinecrest Resources Ltd is evaluating options to build value for shareholders on the 100%-owned Enchi Gold Project in Ghana. Given the rise in the gold price to US$1,500/ounce and changes to capital and operating costs since completion of the Preliminary Economic Assessment (PEA) in 2016, the company is evaluating the metal price sensitivity analysis completed by WSP Canada Inc in the PEA. 

Enchi is comprised of eight licences covering a 50km strike length of the Bibiani Shear zone, a regional scale structure that hosts a number of major gold mines and deposits including Kinross Gold Corporation’s Chirano Mine 70km northeast of the project and the Bibiani Gold Deposit 90km northeast.

The preliminary economic assessment is preliminary in nature, that it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as mineral reserves, and there is no certainty that the preliminary economic assessment will be realised.

The financial models in the PEA prepared by WSP were completed using a base case gold price of US$1,300 per ounce.

Pinecrest's chief executive officer Ryan King said, “We have continued to evaluate options for the Enchi Gold Project which hosts widespread Ashanti-style gold mineralisation.

"Pinecrest completed a 3,000-metre drill program in 2018 which intersected additional gold mineralisation outside of known resource zones, providing Pinecrest the opportunity to potentially expand the scope and size of the Enchi Gold Project. 

"Our exploration team believes there is incredible opportunity to explore along this +40km highly prolific Bibiani shear zone that has only seen shallow previous drilling used to define the current resource zones.  The gold resources outlined in the PEA are open at depth and along strike.

At Kinross’ Chirano gold mine located 70km north of the Enchi project on the same Bibiani shear zone, gold mineralisation has been intersected to a depth of 800 metres whereas the average depth of drilling on the Enchi project extends to a depth of only 175 metres.

"The entire project land package is 568sqkm with numerous high-priority drill targets situated immediately outside of the inferred resource boundary highlighting excellent growth potential.

"The company is evaluating options to build value at this asset for its shareholders as the project demonstrates extensive exploration opportunities along the prolific Bibiani shear zone.”

The financial models include an initial capital cost of $84.4 million, including directs costs, indirect costs and a contingency of $11.8 million (20% of direct costs); sustaining capital of $38.6 million including a reclamation and closure, mining costs, infrastructure costs, EPCM and contingencies.

The financial model was completed on a 100% project basis and includes a 5% NSR to the Ghanaian Government and a 2% NSR to Red Back Mining Ghana Ltd, a wholly-owned subsidiary of Kinross. The Government of Ghana has the right to a 10% free carried interest in the project.

The project is modelled as a near-surface open pit heap leach mine with heap leach feed material trucked from three proximal deposits - Boin, Nyamebekyere, Sewum - to a central crushing and process facility.

Life of mine operating costs, including royalties and refining fees, are $15.45/tonne processed.

Initial tests show that cyanide leaching may be a viable option for the extraction of gold from the oxide domains. Further work on the metallurgical behaviour and physical constraints associated with heap leaching is still required to definitively select heap leaching as the best technical process option.

www.pinecrestresources.com