AMN - GOLD: Five junior companies to watch in 2020

There are five junior precious metals companies active in Africa that should be watched in 2020, according to a report from African Mining Indaba and the MSA Group – Mako Gold Ltd, Perseus Mining Limited, Tietto Minerals Ltd, Hummingbird Resource Ltd and Caledonia Mining Corporation Plc.

The precious metals sector is among four in the ‘20 Projects to Watch in 2020’ report prepared by Investing in African Mining Indaba in partnership with MSA Group with others being battery materials, bulk- and base-metals and energy.

The projects were divided into different categories that reflect traditional success factors, recognise novel applications of technology, highlight best practises with regards to community and environment and promote transformative projects that will have a strong, long-term impact on African mining.

Mako Gold Ltd

Submitting two projects into the acceleration category, Mako Gold is focused on the discovery of gold at the Niou project in Burkina Faso and the Napie project in Cote d’Ivoire.

Mako was flagged as a company that has demonstrated rapid progress through the various phases of work driving the projects up the value curve.

Napie project - In September 2017, Mako signed a farm-in and joint venture with Occidental Gold, a subsidiary of West African gold producer Perseus Mining under the condition that Mako had up to three years to spend $1.5 million on exploration at Napie for a 51% interest.

In May 2019 drilling showed high-grade intersections at Tchaga prospect including 28 metres at 4.86 g/t gold, 25 metres at 3.43g/t and 23 metres at 2.46 g/t.

Mako earned its 51% interest ahead of schedule and is proceeding with the opportunity to earn up to 75%.

Niou project - Less than two months after completion of Mako’s IPO in April 2018, the company began a maiden RC drilling program at the Niou project.

In January 2019 the company announced that six out of seven drill targets revealed significant gold intersections with individual 1-metre samples assaying up to 53.80 g/t and separately widths up to 24 metres at 2.73 g/t.

Resolute Mining (ASX:RSG) has been one of the cornerstone investors in Mako’s IPO validating the company’s assets, management team and strategy.

Perseus Mining Limited

The report listed Perseus Mining’sYaouré Gold Mine as a ‘project phoenix’ – a company that has had significant success revitalising a previously closed or struggling mine, or long-dormant exploration project.

Perseus acquired the mine in 2016 and completed a DFS in 2017 which largely confirmed the initial research and demonstrated the project’s merits based on a 1.6-million-ounce open pit reserve and an 8.5-year mine life annually producing 215,000 ounces at AISC of US$734/ounce over the first five years of operations.

A detailed front-end engineering design study was completed in 2018, confirming the development cost of US$265 million with US$150 million secured through corporate debt and cash.

The exploitation permit was granted in April 2019 and development began shortly after with first gold expected in December 2020.

Tietto Minerals Ltd

Tietto Minerals’ Abujar Gold Project in Cote d’Ivoire was named in the ‘project acceleration’ category. It also has the Dube South and Cestos projects in Liberia.

In April 2018, Tietto’s drilling identified a new discovery 7 kilometres south of Abujar - extending the Abujar’s main deposit over 260 metres in vertical depth.

The resource base was expanded by 146% in April 2019, from 703,600 to 1.73 million ounces of gold, indicating a 1.4 kilometres long high-grade gold core.

Six months later Tietto also announced results of a 30,000-metre drilling program which revealed an additional 24% increase in Abujar’s mineral resource to 2.15 million ounces grading 1.5 g/t.

The latest drilling results helped secured Tietto a further $17 million from existing shareholders and leading global institutional investors which will fund drilling programs for the next three years.

Hummingbird Resources (AIM:HUM) and Caledonia Mining (TSE:CAL) also made the top five.

Hummingbird, which operates in Mali, was flagged for ‘project acceleration’ and ‘creating shared value’ for the surrounding community.

Caledonia was categorised for ‘returns to shareholders’ for Zimbabwean projects that are generating consistent financial returns for shareholders demonstrated through strong share price performance, dividends paid or exit multiple achieved.

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