Semafo is JV partner of AQD has just taken over Orbis and has committed $7M to drill out at Banfora with AQD for 150,000m or auger and 39,000m of RC drilling on six major targets. Some of the targets already contain significant discoveries and many have already been auger drilled by Semfo along the Mouro Shield.
So the bulk of development work is within areas that already hold multi-million ounce potential for low cost mining of near surface oxide gold, especially at Mouro shear (one of 6 targets and the largest) which is riddled with historic artisanal workings where 20,000m of rotary core drilling is concentrated along a 15 km strike. This has potential for development of a resource base within the next 6-9 months.
Semafo is a very competent operator, and developed the nearby Siou deposit from discovery to mining within 18 months. So confirmation of a resource at Banfora has potential to become a mine within the next 12-18 months as first 6 months of exploration is already completed. IMHO conceptual target valuation is very significant to valuation of AQD with retain 20% interest. IMHO 50,000 -100,000 ounces per year equates to 10,000 - 20,000 ounces of annualized production at AISC of under US$850 per ounce for free cash flow of US$400 per ounce or US$4-8M. Warning this is only a conceptual valuation and may turn out to be larger or smaller BUT based on the size of the drilling effort SEMFO is aiming at a much larger target / multiple targets.
This is very exciting, and results will be pouring in over the next 12 months.
AQD Price at posting:
2.1¢ Sentiment: Buy Disclosure: Held
