How big is Awalé’s Odienné project likely to become?
Hard to say for sure at this point, until more work is done on the ground in Côte d'Ivoire.
But one way of answering is to point to the participation of Newmont.
As the world’s largest gold miner by several metrics, Newmont isn’t apt to waste its time with small-scale bits and pieces. Indeed, some people say that Newmont doesn’t get out of bed for less than five million ounces.
Whether such a number is set in stone is moot, but it’s a good rule of thumb.
Newmont is on the ground at Odienné because it looks like it might be big.
And the reason Newmont thinks it’s big is because of the work carried out by chief executive Andrew Chubb and his team.
Chubb is a geologist by trade, who was promoted up through the ranks to the senior chair at Awalé, following a fundraise that took place earlier this year.
At that point new investors were brought in, and the company’s focus was directed firmly at Odienné, with the rest of the asset portfolio in Côte d'Ivoire shifting down the list of priorities.
Chubb has been a geologist in West Africa for many years, he knows what does and what doesn’t look prospective, and he knows Newmont too.
Nevertheless, aside from potential size, there was, and remains, another intriguing question at Odienné: what exactly is it?
Once those two questions as to size and exact geological nature are answered, we will know whether or not Odienné is going to be a company-maker.
But there are already some clear pointers.
Awalé first got down to serious work at Odienné back in 2017.
“We had early success,” explains Chubb.
“We soil sampled three areas, got good returns from two, and then drilled and hit a high grade gold discovery.” The extension drilling found the strike potential was in offsets and was deeper, and was too expensive to drill.
But at that point it got interesting.
“So we went to drill a prospect to the north called Charger,” continues Chubb, and hit a haematite breccia with copper-gold-silver mineralisation. And that didn’t fit the normal shear zone-hosted orogenic model, and was different from the normal Birimian alteration system. I went to the district to check it out.”
Internal discussion with the geology team led to researching global iron-oxide-copper-gold systems such as Carajás in Brazil or even Olympic Dam.
“In the light of that thought,” says, Chubb, “we adjusted our models.”
“We’d always known there was base metals anomalism in the district, and so we dug out all the old data and applied it to this new idea.”
The result was the identification of an anomaly four-to-five kilometres in length, and three targets within it. One was drilled, and found to contain a large copper-moly-gold-silver system. And on the periphery was iron oxide, which would be consistent with the IOCG model.
To Newmont, though, it boils down to a major copper-gold opportunity, that could turn into a district play. Because, although not all of Awalé’s Odienné ground falls into the joint venture, there is nevertheless a great deal of ground both inside and out.
The total license runs to around 2,500 square kilometres, of which around 800 square kilometres is in the joint venture. This means that Awalé gets the benefits of major spending from Newmont on significant portions of its ground, but retains exclusivity on significant portions too.
Not a bad position to be in, especially since Chubb says “Newmont have been really happy with what they’ve been seeing.”
The major is currently funding what is referred to as “resource potential” work, which is really going towards testing the size. A US$15mln spend gets Newmont 75% of the joint venture property overall, but moving ahead, if Awalé elects not to fund at the 25% level it has instead a free-carry written in at 15%.
And if a plus-five million ounce deposit does end up being delineated and then mined, that won’t be a bad outcome at all.
Chances are though, that if the right results come the joint venture’s way, Awalé’s shares will enjoy a considerable re-rating and it will be able to come in for its share of the 25%.
Whatever happens, it looks like we’re at the early stages of something big.
We’ve seen it before in the sector, but it’s hard to argue that we’re overdue another success. Could Odienné be it?