Megado Gold sets a fast pace for exploration at its Ethiopian gold projects

Special Report: Ethiopia-focused gold explorer Megado Gold listed on the ASX last month and is soon to start exploration drilling at its Babicho and Chakata gold projects.

Megado Gold (ASX:MEG) successfully raised $6m from its IPO to develop gold projects in Ethiopia, and said its operations are unaffected by recent civil conflict in the country.

The company has five high-quality gold exploration projects in southern and western Ethiopia, covering 511sqkm of world-class greenstone terrain in the Western Ethiopian Shield.

The company has initiated extensive trenching at its Babicho gold project, as well as collecting rock chip samples which are undergoing analysis.

“We are extremely excited to have commenced our trenching program at the Babicho gold project as well as the sampling undertaken at Chakata,” managing director and chief executive, Michael Gumbley, said.

At the Babicho project in the south of the African country, Megado Gold is targeting a 2km-long gold anomaly in outcropping quartz veins.

Megado Gold’s Chakata project is located 5km along strike from the 3 million-ounce Lega Dembi and 600,000oz Sakaro gold mines in Ethiopia.

The trenching will enhance the company’s understanding of the terrane and structural setting of the mineralisation evident in the company’s gold projects and identify future targets for drilling.

Historical soil sampling at Babicho delineated a coherent and highly significant 2km-long gold soil anomaly with standout results, including 10m at 3.5 grams per tonne gold.

Megado Gold’s projects in southern Ethiopia host the Western and Southern Ethiopian Shields. Image: Company supplied

Ethiopian gold projects located away from recent conflict area

Babicho and the company’s other flagship projects are located 1,000km south from Tigray, a northern province abutting Eritrea, and exploration work continues without interruption.

“The country’s enviable political stability, immense economic potential and clear geographical prospectivity remain compelling reasons to invest there,” said Gumbley.

He said the company was confident that the recent episode of civil unrest in Tigray would be swiftly resolved, as the UN, USA and UK were encouraging the parties involved to work together.

Ethiopian military personnel have clashed with local forces in Tigray province over the past two weeks, and aid agencies are calling on the two sides to declare a ceasefire.

Ethiopia’s prime minister, Abiy Ahmed, a 2019 Nobel Peace Prize winner, has won international praise for his government’s economic and political reforms.

Company technical director Dr Chris Bowden spent many months working in Tigray in previous roles.

“These experiences were part of why we were both motivated to work again in Ethiopia,” said Gumbley.

Bowden is credited with discovering Allied Gold Corp’s 1.5 million-ounce Dish Mountain deposit in Ethiopia.

The only disturbance to the company’s operations in Ethiopia to date has been a supply chain issue that delayed its maiden drilling program by only one week.

Fast-developing country with political stability

Ethiopia is fast modernising and is becoming an important African hub for gold mining.

A new $US3bn rail line connects Ethiopia’s capital Addis Ababa to the port city and country of Djibouti on the Red Sea.

The government wants Ethiopia to achieve 137 tonnes of gold production in the 2020s.

“Safety is of preeminent importance to Megado. We are fortunate that our staff and operations can proceed with the same impressive rapidity exhibited to date,” said Gumbley.

This article was developed in collaboration with Megado Gold, 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.