Special Report: Small cap explorer Chesser Resources (ASX:CHZ) has now made two spectacular gold discoveries in two years at the Diamba Sud project in Senegal – and there’s plenty of upside to come.

Acquired by Chesser in 2017, Diamba Sud was a greenfields (essentially unexplored) project along the underexplored western side of the prolific Senegal-Mali Shear Zone (SMSZ), home to some truly monstrous gold mines.

The shear zone is the source of the deep gold-bearing fluid. However, it is the splays coming off the shear zone that provide the ‘open space’ to allow these deposits to form.

Like all these big mines in the region, Diamba Sud is located on ‘splays’ off the main shear zone.

The prolific Senegal Mali Shear Zone (“SMSZ”) Orogenic belt hosts over 45Moz of Tier 1 gold mines.

In 2019, Chesser made a big greenfields discovery at Diamba Sud called ‘Area A’. Highlight intercepts included 21m at 6.62 grams per tonne (g/t) gold, 14m at 9.53g/t and 16m at 8.51g/t.

Thick, shallow, and high grade – those hits are extremely impressive in their own right.

The drilling at Area A has now defined two mineralised structures with elevated gold grades where they intersect.

But Chesser had also defined less advanced targets at the nearby ‘Area D’ and ‘Western Splay’, which Chesser surmised could be even bigger than Area A.

In late July, the Chesser share price spiked after a remarkable set of gold intersections in early stage drilling at Area D:


Chesser had hit exceptionally thick, shallow, high-grade oxidised gold across a 200m wide zone in five adjacent holes.

Highlights included 48m at 6.7g/t gold from 24m, and 55m at 4.27g/t gold from 16m.

It wasn’t just the thickness and the grade of the gold that got investors excited, but the consistency across that line of five holes which were spaced 50m apart.

The Area D discovery is shallow, thick and high grade.

“I would’ve been very happy with one of those holes. To get five like that beside each other was spectacular,” Chesser managing director Mike Brown told Stockhead.

“You just don’t see that very often. I can’t recall a similar section from other companies.

The hits at Area A were impressive, but to get this sort of continuity at those sorts of widths, across such a wide zone at Area D was remarkable.

“The grade and continuity across that section is amazing,” Brown says.

“It’s still open along that section – there’s 250m to 300m wide coverage and it’s still open at both ends of that line.”

It is also potentially ‘open’ out to the northwest along the structural trend, and there could even be ‘repeats’ at depth.

“I think we have great potential to be onto something very significant,” Brown says.


Scratching the surface at Diamba Sud

There remains a number of completely untested structures to drill in the project area, like Western Splay.

And don’t forget about Area A, which alone “has all the hallmarks of all the big mining operations to the east of us”, Brown says.

“The intensity of what we are seeing at Area A still leaves considerable scope to be able to extend that down to the southwest.”


The re-rating events have just started

In October — once the wet season in Senegal is over — a fully funded Chesser will kick off a 20,000m drilling campaign to expand both of these high-grade discoveries.

Investors can look forward to a wave of potentially rerating news flow heading towards the end of the year.

“We had an initial kick from the holes at Area D, which were obviously a significant rerating event,” Brown says.

“But it’s really only five holes into it, so there’s significant discovery potential.

“The value creation you get from exploration drilling is significant. We have that scope at Area D – there’s a lot of potential there.

“Then we have Area A. If we can keep getting the widths and grades we have been getting at Area A, and extend those to the southwest, that’s a big enhancer.”

That campaign will hopefully take the company from October through to the end of the year, Brown says.

“Then we will go back for a second round, looking to infill drill on Area A as we start pushing towards an initial resource.”

Brown doesn’t have a ballpark expectation for that initial resource, “but regionally, those projects are big”.

“For investors, this is exposure to further exploration drilling upside, alongside exciting discoveries that already show significant high grades at shallow depths,” he says.

“Getting the drill rigs spinning again by October is now our focus.”

This article was developed in collaboration with Chesser 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.