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CAR emerging as next major gold producer

TSX-V listed gold explorer Axmin's most advanced project, Passendro, in the Central African Republic (CAR), recently saw the completion of its feasibility study. Should things go ahead as planned, gold production could come on board as soon as 2011, head of exploration, Dr Jon Forster, tells Nelendhre Moodley.

Speaking at the Mining Indaba held in Cape Town last month, Forster says that, as the first primary gold explorer in the country, the gold potential is untapped. The Passendro gold discovery, the company's most advanced project, is located along a 140km strike of the Bandas greenstone belt in the CAR. An initial capex of C$200m for the 3mtpa mine, expected to produce 200 000ozpa, has been allocated. While the strip ratio is 8,4 to 1, Axmin believes that the project attractiveness lies with the shallow reserves and high oxide component and its 'soft ore with good recovery potential '.

The project comprises five different pits in a 3km radius, at depths ranging between 40m and 120m. The Passendro project has an indicated 23,2mt resource at a 2,4g/t grade and an inferred 16,7mt resource at a 1,9g/t grade. Although the LOM is around six years, the company is confident of further extensions as it explores the rest of its 1000km² licence area to bulk up ounces. Axmin is currently investigating the gold anomaly found in a 50km²area. Since the project will require simple technology, EPCM project house, Senet, which was involved in the feasibility study, has suggested an industry standard gravity CIL plant. The geology and mining work has been outsourced to SRK from the company's Cardiff (UK) office, while Golder Associates has been contracted to complete the environmental studies.

Forster is optimistic that the mining licence will be awarded in the next few months. The environmental permit has already been issued by government. Banks and similar entities have previously shown a significant interest in the project, however, since the economic slowdown, Axmin has adapted its strategy to investigate 'a range of opportunities, including starting initially on a smaller scale'.

KOMAHUN GOLD PROJECT -SIERRA LEONE

With geology similar to Passendro in the CAR, Forster believes that this smaller project could target about 50 000ozpa Having announced a significant increase in ounces and grades in September last year, Axmin has initiated a third party scoping study investigating potential production levels. "We believe that there is good potential to expand the resources to depth and along strike; currently they stand at 0.4mt grading 9.1 g/t Au (110,000oz) in the indicated category and 3.1mt grading 4.3 g/t (435 000oz) in the inferred category.

"The resource currently extends to 350m vertical depth, with Axmin intending to test up to 500m vertical depth in the next phase. With this the company believes that it may develop sufficient resource to justify a detailed engineering study." Axmin anticipates developing Komahun as an underground mine.

"Project constraint is the exploration budget, which has 'been substantially reduced from last year'. "Last year's exploration budget for Mali and Sierra Leone was about C$7m, whereas for 2009 there is only a minimal budget to keep operations ticking over."

KOFI GOLD PROJECT -MALI

Located in western Mali's Kenieba Inlier, which is host to multi-million ounce deposits, including the Sadiola-Yatela project of Anglogold Ashanti and IAMGold, Randgold's Loulo-Yelea project and Avion's Tabakoto-Segala project, the Kofi gold project has a combined inferred and indicated resource of nearly 700 000oz. On its large licence area of some 500km, Axmin has identified four main discoveries 'with a whole range of prospects to drill'. "The target is to maybe double current resources and possibly develop it as a stand-alone project," Forster explains.

On this highly prospective area, he is confident that Axmin 'should be able to make further near surface discoveries, before reverting to deeper exploration'. With two projects high up the exploration ladder moving towards scoping study and its flagship project awaiting the go-ahead for mine development which could take between 18 and 24 months, Forster is confident that Axmin will step up from explorer to gold producer sooner rather than later.






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