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ReGIonAL RoUnD-UP AFRIcA

Chesser’s next move

hesser Resources Ltd has moved into ing study.” sion of existing shareholders and a number
CDFS mode at its Diamba Sud gold pro- Drill results from Karakara include 1m @ of new domestic and offshore institutional
ject in Senegal after a scoping study provid- 18.1 g/t gold from 98m, 1m @ 16.6 g/t from and sophisticated investors.
ed encouraging figures in March. 46m, 5m @ 7.5 g/t from 66m and 3m @ 6.6 Grove said the investors saw the potential
Based on the project’s Area A and Area D g/t from 203m. for Diamba Sud amidst a difficult market.
resources which total 15.2mt @ 1.6 g/t gold, Mineralisation at the target extended by “Overarching, the current gold market is
the study revealed a post-tax NPV of $419 75m for what is now a 200m strike length pretty tough,” he said. “As a West African
million from the production of 704,000oz at open at depth. gold explorer on the ASX, it can take some
an average AISC of $US820/oz over a 7.5 Much of the drilling which has taken time to get recognition. The people who
year mine life. Payback occurs after 1.25 place around and below artisanal workings have spent the time to look at [Diamba Sud]
years for an IRR of 59%. also helped to identify the Kassassoko tar- can definitely see the value.
Diamba Sud is expected to deliver get 2.5km south of Karakara. Kassassoko “Up to 60% of [the funds will] go towards
244,000oz at $US545/oz over the first two has returned rock chip samples averaging adding to the resource base at Karakara
years of production. 3.8 g/t gold and peaking as high as 10.3 g/t. and Area A and Area D. The rest of it is
The study was based on a $US1,800/ With the DFS and ESIA studies under targeting some other prospects on the
oz gold price and at the time of print, spot way at Diamba Sud, Grove is confident of tenement area to develop them up and to
prices for the precious metal were hover- ticking important project boxes while grow- demonstrate the prospectivity of the area
ing just above that. However, the volatility in ing the resource base. and hopefully identify some more minerali-
sation.”
Grove believes there’s a discrepancy
between the NPV of Diamba Sud and the
market cap of Chesser, which was $56 mil-
lion at the time of print.
“I think if we can add the extra ounces to
the mine plan, which we think we can this
year, that will materially and significantly fur-
ther increase that [project value],” he said.
“At some point, that value gap has to dimin-
ish somewhat.”
A large motivator to further prove up Di-
amba Sud’s resource base comes from the
neighbouring Barrick Gold Corp, which op-
erates the 12.5 moz Loulo gold mine and
the 5.5 moz Goukoto gold mine just over
the border in Mali.
“Barrick are still actively exploring on ten-
ements next door,” Grove said. “They’ve
identified numerous mineralised prospects.
[The area] appears to be an emerging gold
Operating on the Senegal-Mali border, Chesser’s Diamba Sud gold project has seen a long camp on the Senegal side. We’ve found 3-4
history of artisanal drilling in the West African region bits of mineralisation; Barrick has found at
least a couple.”
the gold market has been evident this year, “Our total aim is to deliver more than 1 Investors can expect a decision on the
with spot prices fluctuating from as low as moz [gold] in a mining inventory by the end DFS of Diamba Sud in the next two years
$US1,789/oz in January and to a peak of of the year which will flow into the feasibility with a number of long-lead items and the
$US2,052/oz in March. study,” he said. “Take the 7.5 year mine life ESIA studies contributing to a majority of
Chesser managing director Andrew to a 10-year mine life...with a lot of explo- the work.
Grove is looking to safeguard Diamba Sud ration opportunities still around the project “The long-lead items on the DFS are
from such sporadic price movements by and Karakara will go a long way to deliver- the environmental baseline work, that’s 12
improving the project’s fundamentals via ing that. months of data collection to get the baseline
ongoing drilling at the Karakara target, 1km “We should see some strong news flow information together so that we can frame
southwest of Areas A and D. coming from Karakara soon and we’ll get the ESIA information we’ll send to the Gov-
“The scoping study is based on a con- an initial resource on that somewhere in the ernment for the mining licence,” Grove said.
tained 750,000oz from the two-and-a-bit middle of the year and then we’ll do a fully “We’re thinking 12-18 months for the
pits at Area A and Area D,” Grove told updated resource somewhere by the end of feasibility study and that will tie in with the
Paydirt. “We found Karakara late last the year which hopefully delivers us more completion of the ESIA. In 18-24 months,
year, we’ve done a fairly extensive drill pro- than 1 moz in the mining inventory.” we should be in the position to make a de-
gramme on it but only just recently received Dimba Sud’s March scoping study was velopment decision.”
four holes which we put out. So, the drilling followed by a $12 million placement that – Fraser Palamara
at Karakara wasn’t included in the scop- same month. The fundraising saw the inclu-

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