Shanta Gold Ltd (AIM:SHG) announced its first indicated resource for the West Kenya project following its Phase 1 exploration programme.
The Isulu deposit contains an estimated 82,700 ounces, grading 10.62 grammes a tonne (g/t), at the indicated level, implying a resource conversion rate of about 130% from the inferred category. While the Bushiangala deposit contains an estimated 34,900 ounces, grading 3.92 g/t, at the indicated level, a conversion rate of about 110%.
“Following a rapid Phase 1 exploration programme at West Kenya in 2021, we're delighted to announce a first indicated resource for the project of 117,600 ounces,” said chief executive Eric Zurrin.
“We're particularly excited about the high-grade nature of the ore body at Isulu which has contributed to a conversion rate of over 100% following new discovered zones during infill drilling.”
Phase 1 drilling also added inferred resources of 19,100 ounces at 12.95 g/t at Bushiangala, and 2,500ounces at 3.51 g/t at Isulu.
Shanta’s Phase 2 and 3 drilling programme, which is targeting about 994,000 ounces of inferred resources for potential conversion to the indicated category, has already intersected high grades.
One of the drill holes intersected 4 metres at 706g/t, including 0.5 metres at an exceptional 5,643g/t.
READ: Shanta Gold reports further high-grade drilling results from its West Kenya gold project
“Whilst we've made real progress in West Kenya in such a short amount of time, our Phase 2 drilling programme is ongoing, targeting zones between 200-500 meters and additional upside from high grade intersections already identified in Phase 2 between 0-400 m,” said Zurrin.
“We remain focused on moving forward swiftly to fast-track this project to development and production, with 30-45% of total planned drilling at West Kenya to be completed by the end of this year. A total resource estimate will be announced at this time.
“Exploration continues to underpin our growth strategy and with an extensive portfolio of increasingly high-grade exploration assets to complement our production and development portfolio across Tanzania and West Kenya our outlook is the strongest it's been in the history of Shanta Gold,” he concluded.
House broker Liberum, which has a 35p target price on the shares, said: "Assuming similar conversion ratios in Phases 2 and 3 (targeting c.994koz of Inferred resources), this suggests 10-30% upside on our base case – and this just based on in-fill drilling, with the company aiming to triple West Kenya’s resource over the next three years via step-out drilling."
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