Sarama Resources has received strong demand for a $2m placement that will be used to investigate the potential to fast track the development of the multi-million-ounce Sanutura gold project in Burkina Faso.
Sarama Resources (ASX:SRR) is undertaking a $2m placement to advance studies for its 100%-owned Sanutura project, which sits in the prolific Houndé gold belt that has an endowment exceeding 20Moz.
The project already hosts a nearly 3Moz indicated and inferred gold war chest, but Sarama is confident it can grow this further, particularly given the consistency with which the explorer continues to unlock valuable gold mineralisation outside of the existing resource.
About a third of the resource is in oxide material, and two thirds is over 2g/t gold, opening the way to a staged and scalable development, established on high-grade oxide material, with a strong economic case.
And Sarama is keen to get cracking on a preliminary economic assessment (PEA) to potentially accelerate the Sanutura project into development.
“The funds raised from the placement will be used to evaluate an accelerated multi-stage development at the Sanutura project which we believe has the potential to generate a very compelling investment case based on the extensive oxide resource and related grade and cost profile,” managing director Andrew Dinning stated.
The Euroz Hartleys-lead placement is being backed strongly by Sarama’s directors and existing shareholders, but the company will also welcome several new institutional, professional, and sophisticated investors to the register.
This is a vote of confidence for the company’s plan to start work on a PEA.
Sarama will issue 20 million Chess Depositary Interests (CDIs) at 10c per CDI, which is very close to the current share price.
Sarama Resources (ASX:SRR) share price chart
CDIs are instruments traded on the ASX that allow non-Australian companies to trade their shares on the Australian bourse.
In this case, Sarama hails from Canada, with its primary listing on the TSX Venture Exchange.
Board and management have committed to taking up 500,000 CDIs in the placement.
Forging ahead to a bigger resource
Recent discoveries are expected to add to the oxide component of the already large resource, which Sarama plans to update after the completion and follow up of the current drill program – the majority of which is shallow, cost-effective aircore drilling.
Recent drilling by Sarama has discovered shallow, high-grade mineralised zones outside of the current resource, including high-grade oblique mineralisation within the central area of the 2.5Moz Tankoro deposit and a whole new geological target model in the southern area of the deposit, where anomalous high-grade flat zones have been intersected.
The central area of the Tankoro deposit hosts almost 80% of its contained metal and remains the economic focus of the project.
Sarama’s large foothold in gold-rich West Africa is just 60km south of Endeavour Mining’s 5Moz Houndé mine, 120km south of Fortuna Silver’s high-grade +1Moz Yaramoko mine and 140km south of Endeavour Mining’s 5Moz Mana mine.
This article was developed in collaboration with Sarama Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.