West Africa continues to deliver for Aussie gold explorers as Azumah Resources today revealed a war chest that’s grown by 65 per cent to over 1 million ounces at its Wa project in Ghana.

Even better for Azumah (ASX:AZM) is the fact that it’s a reserve not just a resource.

Typically reserves refer to discoveries that are commercially recoverable using existing technology, while resources are either not yet commercially viable or are mere speculation.

Shares climbed over 13 per cent to an intra-day high of 3.4c on Wednesday morning.

A “well advanced” feasibility study indicates Azumah’s Wa project would have a net present value (NPV) of US$177m ($247.5m) and an internal rate of return (IRR) of 35 per cent.

NPV and IRR are metrics used to assess the profitability of a project.

Azumah Resources (ASX:AZM) shares over the past year.
Azumah Resources (ASX:AZM) shares over the past year.

Azumah reckons it could pay the $US117m project off in 1.6 years and it would run for at least 11 years producing about 107,000 ounces each year for the first six years.

At the current Aussie dollar gold price of over $1830 an ounce, that would fetch just under $200m each year.

Managing director Stephen Stone says the Wa gold project is now an “extremely compelling development opportunity” after Azumah’s joint venture partner improved the economics to a point where it can now compete with its peers.

“The Wa gold project is now well primed to be Ghana’s next commercial-scale gold mine, with mining leases already granted, EPA permits well advanced, grid power to site and the strong support of the Ghana government,” he told investors.

“The remainder of 2019 will be dedicated to finalising the feasibility study and putting everything in place for a development decision.”

Azumah wants to increase the resources and reserves further by drilling another 40,000m on its 2400 sq km landholding.

The company now plans to kick off funding talks as industry representatives begin the trek to Cape Town, South Africa for the world’s largest mining investment conference, Mining Indaba.