KWABENG CAMP, Ghana – Xtra-Gold’s mining camp now numbers 50 people, all but two Ghana natives. When excavating and drilling resume in early June, that number will more than double, CEO James Longshore tells me.
James Longshore is not a Ghana native. The Halifax-bred businessman spends most of his time in the nation of 24 million and “looks more like a buccaneer than a prospector,” says Kevin Thomson, exploration manager for (in our view) the most successful Ghana prospector that is not producing gold of the past three years, Perseus Mining Ltd. (TSX: T.PRU, Stock Forum).
Xtra-Gold Resources (OTC:BB: XTGR, Stock Forum) is a Planetary Prospect of Ticker Trax and 
our only Ghana and West Africa candidate for prospecting success.
Mr. Thomson, after visiting Xtra-Gold’s Kwabeng Camp in December, says he came away impressed with the kitchen food. The geologist and Newmont Mining refugee, having lived in Ghana for most of the past 14 years, knows his in-country restaurants. He especially likes his fried and grilled grouper fish – with South African red wines and Ghana’s flaming chili sauces.
Mr. Thomson also knows Ghana geology. His specialty at Perseus is central Ashanti, largely the Ayanfuri Mine area that is within 15 months of producing 200,000 ounces of gold a year. So when Mr. Thomson saw the little-advertised Kibi Gold Trend that Xtra-Gold has cornered in terms of mining and prospecting leases, he says he felt a pang of desire.
“A real mine, under construction, yes … and we are all proud of our Ghana work at Perseus. But you know, none of us rock knockers, very few I know, want to end their prospecting days,” Mr. Thomson, a Canada-trained Ghana resident, says.
Prospecting is what stokes Mr. Longshore, a 43-year-old economics major from Maine’s Bowdoin College. He’s a self-taught natural resources investor with a track record going back to 1993 or so and the Voisey Baynickel deposit miracle.
Prospecting is what Mr. Longshore has in his Ghana bag for geology professionals such as Mr. Thomson and to his current Xtra-Gold exploration chief, Yves Clement of Sudbury, Ontario. (See photo of Kevin Thomson and Mr. Longshore in Accra.)
Mr. Longshore, for example, just purchased with cash and stock a new excavator. The $250,000 machine this month started road construction and preparation for pads for an upcoming Boart Longyear drill program across the Kibi Gold Trend.
He and Mr. Clement, along with new consultant Robert Casaceli of Franco-Nevada (TSX: T.FNV, Stock Forum), have plotted a minimum 5,000 meters and 50 diamond-drill holes for the fresh program. It follows a 68-hole drill program across concessions at the southern end of the Kibi in 2009 and late 2008.
“That will be the minimum budgeted,” Mr. Longshore tells me. “It could double, based on additional capital from possible alluvial deals and of course, investors.” Xtra-Gold has $3 million in the bank. The planned drilling program will run about $750,000.
As we stand here at the camp this week, Mr. Longhshore and his team are discussing a feasibility plan for at least two lease areas for alluvial gold. One of the people at the camp who have agreed to “prove up” alluvial is Ghana’s best known alluvial consultant and once a full-time Xtra-Gold geologist, Kofi Agyemang, a Ghana native.
The alluvial reality is compelling for a prospector that is focused on hard rock, not panned gold. Alluvial is often a distraction for gold prospectors.
Yet if consummated this week or next, Xtra-Gold’s fresh alluvial operations will welcome contract workers booted from an illegal operation nearby. The illegal panners were shut down by the police. “If it all works out, we could see 1,000 ounces a month generated, and we get 100 ounces a month as a royalty. That’s what, $1.2 million a year to us of pure profit,” says Mr. Longshore.
The social and fundamental angles of alluvial are significant. First, Xtra-Gold is probably conservative in its 1,000 ounces a month of production along the Birim River, which runs through its concessions here. Then there is the ever-present community relations side of the equation.
“It is more of a good-will project that provides jobs for formerly illegal miners and guides them toward adhering to environmental standards,” Mr. Longshore of Nassau, Bahamas, says.
The galamsay miners, whom we have seen 
work this river bed, are efficient at what they do yet often sidestep the back-filling of pits when they are surface-mining.
Xtra-Gold’s alluvial resource, in historic terms, benefits from the Birim River headwater on the (Nevada-domiciled) company’s Kibi property. Some estimates put the alluvial resource – the easy pickings sifted from panning and other water sluicing – at 200,000 ounces – the largest in the country on concessions controlled by one company.
For Xtra-Gold, alluvial operations are also political good will between the growing company and the Ghana Minerals Commission. The government bodies, primarily environmental regulators, want to curtail illegal mining. Minerals Commissions told me in one interview that they consider Xtra-Gold among the most active in working with Ghana’s alluvial miners.
Mr. Thomson at Perseus (PRU) tells us that the EPA in Ghana, the environmental arm, takes great solace in seeing the standardizing of alluvial mining practices. “Anytime you legalize a galamsay operation, you are making friends,” he says. (Please see photo of Kevin Thomson with James Longshore in Accra.)
Mr. Thomson took a resource of 500,000 ounces at several sites, including Ayanfuri, to more than six million ounces in three years. Perseus and its $700 million Canadian market capitalization (along with other success stories Red Back Mining (TSX: T.RBI, Stock Forum) and Keegan Resources (KGN and T.KGN) are why Xtra-Gold easily could quintuple its $36 million market worth in the view of Ticker Trax. (As with all Planetary Prospects, we here at home own shares of Xtra-Gold – 125,000 shares and rising.)
“There is really not a lot here (in Ghana) that is being discovered in the way of gold,” says Mr. Thomson. (Other gigs for Mr. Thomson – Newmont Mining (NEM) and Battle Mountain Gold.)
Mr. Thomson, in an Accra interview in the capital city, said, “Let’s face it, the 10-baggers are mostly gone in Ghana. This and maybe one more are what we have.” Mr. Thomson on the cheap front also mentioned PMI Gold (TSX: V.PMV, Stock Forum), a $40 million company active in Ghana.
As for Xtra-Gold, we head out Thursday and Friday to see for a second time in eight months its five concessions across the Kibi Gold Trend. Our interest is in the hard rock and not really the alluvial dirt. Thegranitoid-hosted quartz stockwork at the Apapam concession might show one day a resource of three million gold ounces. Or, if Mr. Longshore’s team wins the day and locates a large structure that created the mineralization here at the base of one of the Kibi hills, more than 10 million ounces.
Ticker Trax is steadfast in its hopes that Xtra-Gold’s over-the-counter shares some day soon will qualify for a stock listing on an equity exchange regarded as a proper home for mining companies.
In the meantime, Xtra-Gold’s team is actively pursuing its 43-101 compliant report on all of its Ghana activities. The report likely will see light of day in May. (Please see photo taken today of Mr. Longhsore at the entrance to the Kwabeng concessions.Also: Mr. Longshore and Ghana prospector and Xtra-Gold workerJ.K. Mine.)
We here at Ticker Trax see the shares rising sharply in coming weeks and months as appetite increases for Ghana gold prospectors within one year or less of showing a resource of three million or more ounces.
That new Xtra-Gold consultant, Mr. Casaceli, spent three days at the Kibi earlier in April. He sees the Kibi and Xtra-Gold’s grip on leases in the emerging gold district as a rare chance to derive Ghana wealth in multiples already achieved by Keegan, Perseus and others.
More to come. Please see our latest report: Ghana Gold.
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THOM CALANDRA of Ticker Trax helps his audience find value in a quagmire of investment choices. Thom co-founded CBS MarketWatch and MarketWatch.com. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom pegged $300-ounce gold as a long-term hold in 1999 and in 2000. He has been covering life-sciences and natural resources since 1988.
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