Plenty of ‘low-hanging fruit’ for Sarama in gold-rich West Africa

Sarama Resources is aiming to add potentially as much as half a million ounces to its gold inventory once the company has completed its large 50,000m drilling program at the Sanutura project in Burkina Faso.

Sarama Resources (ASX:SRR) has a long list of targets to drill at Sanutura, but right now the focus is on the shallow, near-surface oxide material that has delivered some very promising intercepts and is expected to add significantly to the existing resource.

Of the nearly 3Moz indicated and inferred resource, around a third of it is in oxide material, which presents a strong economic case for a staged development.

“We’ve got a lot of targets; our biggest challenge is prioritising,” managing director Andrew Dinning said in Stockhead’s recent RockTalk on West African gold.

“We’re not focused on infill drilling at this point in time because we think there’s a lot of low hanging fruit that sits outside the resource.”

The large oxide resource currently sits at around 1Moz and is located close to the surface.

Sarama expects to update the resource following completion of the 50,000m program, which is the first major drilling undertaken in five years.

“Historically, we add between 7 and 10 ounces per metre drilled, so we would like to think out of a 50,000m program we’d add between 300,000 and 500,000oz, and that will all be shallow, near-surface material,” Dinning explained.

The project sits within the prolific Houndé gold belt 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.

The Southern Houndé belt gold endowment exceeds 20Moz and Burkina Faso has eight mines in operation which between them are expected to deliver over 2Moz of gold production in 2022, and a further two mines currently in development.

The economics of the Sanutura Project look promising with the large amount of oxide material and attractive grade profile providing Sarama with development flexibility.

“We see the Project being a staged development,” Dinning said. “We’ve got a very simple flow sheet to establish a project on.

“We’ve also got a grade profile where we can front load grade giving us a quick payback and very good economics earlier on, and as we move through the different material types, we just upgrade the mill progressively out of cashflow and ultimately have a very long-life project that generates a lot of money.”

Dinning noted Sarama would be looking at a less than two-year payback.

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.