Kerim Sener, Managing Director of Ariana Resources PLC (AIM:AAU) recently met with Proactive to discuss the upgraded resource at the Dokwe gold project in Zimbabwe.
Here’s what he said:
Proactive: So you've completed a revised resource estimate (MRE) for the Dokwe project, including Dokwe North and Dokwe Central. Take us through it and how it improves the economics and prospects for the project.
Kerim Sener: We're really pleased with the outcome of the resource estimation. This builds on a number of months of work that includes due diligence drilling that we completed from late last year through to around February of this year.
The results from that drilling program have been received, and we've integrated the latest data into the revised resource estimate, along with a very detailed analysis, over 21,000 individual measurements taken with a portable XRF unit across all the historical drill cores.
Kerim Sener: So there's about 42,000m of high-quality drill core available on the project.
We've analyzed a large part of that and built an entirely new geological model for the Dokwe project, both Dokwe North and Dokwe Central.
The pre-feasibility study, which we updated not so long ago, detailed Dokwe North alone.
Kerim Sener: Dokwe Central had a JORC 2004-compliant resource and was never integrated into the project.
This represented a big opportunity for us as we saw potential at Dokwe Central, let alone further upside at Dokwe North.
We've now updated the Dokwe Central resource estimate to 2012 compliance.
This features as part of the latest estimate we announced earlier in the week, coupled with a completely revised geological model for Dokwe North.
Kerim Sener: In total, we've got about 55.9Mt at over a gram per tonne of gold for 1.83Moz of gold overall between Dokwe North and Dokwe Central.
At higher cut-off grades, considering the economics at different gold prices and pit optimization work, we can see a pathway from about 0.8Moz in the prior PFS optimized resource, to potentially 1 million ounces across two pits, Dokwe North and Central.
We see an opportunity to direct the feasibility study along these lines, looking at a scenario of dealing with a million-ounce reserve and producing gold over 15 years.
Proactive: Take us through the pit optimisation study that's currently underway. When do you expect to finish that?
Kerim Sener: The work is in progress at the moment with various steps to take.
We've looked at different gold price scenarios, including $2,000 and $2,500 cases, compared to historical optimizations at lower gold prices.
The wonderful thing about the Dokwe North ore body is that it's an open-pit, shaped ore body.
Most of the resource is captured by the open pit, making it robust and lending itself to a strong resource position and eventually a reserve position.
There's more work to finalize this, but we plan to announce the results soon.
Proactive: This is all moving forward to a feasibility study for the projects, but that's also conditional on your merger with Rockover. Take us through that transaction.
Kerim Sener: We plan to conclude the transaction by the end of June.
There's a shareholder vote on June 26, and then the actual merger process will be conducted in the Virgin Islands (BVI) between two BVI holding companies.
By the end of June, we expect to be moving into the feasibility study work for the Dokwe project.
The merger ratio, based on an independent valuation, is 62.5% in favour of Ariana shareholders and 37.5% for Rockover shareholders.
Proactive: What sorts of news flow should your investors be looking out for in the short to medium term?
Kerim Sener: Aside from the optimization work, there's ongoing associated work to understand the geological opportunity at Dokwe.
This leads to a late-stage PFS update and an economic update. We'll then move into the feasibility study.
Proactive: Kerim Sener is the Managing Director of Ariana Resources.