In the news: Amani GOLD
AMANI GOLD (formerly Burey Gold)††
ANL : AU | A$0.030 | US$29m | Speculative Buy
Updates on Tendao Due Diligence and Kebigada Resource Rescheduled
Amani Gold has announced initial channel sampling results from its due diligence programme on the Tendao Project (adjacent to the Giro Gold Project) and that diamond drilling is planned, with results expected in 2Q17. The due diligence period for the acquisition of the project has been extended by 12 months, until 7 February 2018, to allow additional work to be completed.
The company also announced that additional infill drilling will commence shortly at the Kebigada zone on the Giro Project in order to “better define the high-grade zones” and “provide resource confirmation in certain areas”. In order to be able to incorporate the additional data from this programme, Amani now expects to complete the maiden resource statement by the end of 2Q17 (previously it was 1Q17).
COMMENT: The Tendao Project area surrounds the Giro Project to the north, west and south. The main focus is on the Tendao prospect, which lies 14km south of the Kebigada area, at which artisanal workings cover a strike length of 4km. Results from historic drilling and recent channel sampling are encouraging, and the company plans two diamond drill holes totalling 400m to test a diorite/BIF sequence at the Mondial workings. Two more holes are planned to test mineralisation below the CPA workings. Drilling is set to commence by the end of March.
Drilling at Kebigada has been undertaken on 100m drill sections. The resource consultant has recommended reducing the spacing to 50m in some areas to define the high-grade structures more accurately and increase confidence in the resource model. This would allow a better separation of the high- and lower-grade material in the model and provide a better reflection of grade and tonnage at different cut-off grades.
For drilling, 3,500m of infill RC is planned, with 3,500m of diamond drilling to test depth extensions of high-grade structures and 3,500m of shallow, scout RC drilling to test a number of targets in the Kebigada area. Drilling is planned to be completed (and assays reported) within 3-4 months.
We continue to recommend the company as a Speculative Buy.
In November 2016 Amani purchased an exclusive right to negotiate terms for a 60% interest in the Tendao Project in return for US$2m (US$0.25m in cash and the remainder in shares) — The Tendao Project comprises five licences covering 1,456km2 adjacent to its Giro Project area in the DRC, increasing its tenement holding to over 2,000km2. The transaction remains subject to administrative and tenure due diligence, and to the completion of commercial negotiations on the terms of the company’s participation with the state-owned mining company SOKIMO and local businessmen, which would own 30% and 10% of the project respectively.
Amani’s current market cap is A$38m/US$29m — The company has 1,257m shares outstanding, with 434m options exercisable at A$0.05/share until July 2017 and 52m options and performance rights exercisable at prices from A$0.05/share to A$0.10/share expiring from November 2019 to December 2020. The company also has 9m performance rights outstanding. Cash resources at the end of December were A$6.2m.